Real Estate Institute cautiously welcomes ‘Homes for Australians’ plan

The Real Estate Institute of Australia (REIA) has responded to the Federal Budget 2024, acknowledging the focus on housing through the ‘Homes for Australians’ plan but emphasising the need to consider the initiative in the context of the entire Budget and the commitment to delivery by all levels of government.

REIA President Leanne Pilkington expressed doubt about the plan’s ability to significantly impact housing supply, stating, “It is unlikely the current Homes for Australians package will shift the dial on bringing more homes to market more quickly.”

She noted that this is particularly true given “the Treasurer dialing down expectations around the 1.2 million homes target in the week leading up to Federal Budget 2024.”

Ms Pilkington highlighted the crucial role of inflation assumptions and interest rates in determining housing supply and affordability, stating, “It is the inflation assumptions and the interest rates outlook that will be the single biggest factor in housing supply and affordability Tuesday night’s budget papers.”

She added, “You can repackage and reallocate all the funding in the world but the reality is this: a decline in interest rates of 50-basis points would boost net housing supply by 54,000 dwellings and a rise of 50-basis points would decrease net supply by 45,000 dwellings.”

The REIA President also criticised the failure to address stamp duty reform, calling it “unfathomable that once more the National Cabinet and the Federal Treasurer continue to ignore the biggest opportunity to unlock supply within the existing housing inventory.”

She argued that stamp duty reform could bring around 4 per cent of existing homes to market, equating to approximately 430,000 homes.

On a positive note, Ms Pilkington welcomed the Treasurer’s commitment to maintaining negative gearing, which benefits Australia’s 1.2 million property owners who supply rental accommodation.

However, she expressed disappointment with the lack of action on Commonwealth Rental Assistance (CRA), calling it “absurd that CRA continues to remain well below market rentals in an historic underspend.”

Ms Pilkington stressed that increasing CRA is a measure that the Federal Government can implement immediately to support Australians struggling with the cost of living and high rental prices.