Real estate body warns budget measures could keep rates higher for longer

The Real Estate Institute of Queensland (REIQ) has expressed concerns that some measures in the federal budget could end up putting more pressure on mortgage holders and small businesses by keeping interest rates elevated.

REIQ Chief Operating Officer Dean Milton said while energy bill rebates may provide short-term relief from inflation, they could have the opposite effect over the medium-to-long term.

“Instead of the energy bill rebate cash splash to all Australians, our view is that the Federal Government could have shown more restraint and means tested eligibility to ensure it goes to those that need it most,” Mr Milton said.

“We would have liked to have seen a budget which took the pressure off inflation to provide some relief for mortgage holders and small businesses – who could now be carrying the heavy load of high interest rates for longer.”

Mr Milton welcomed the budget’s increased rental subsidies for vulnerable Australians as a “stop-gap” measure to help with cost of living pressures. However, he said supply-side initiatives to support new housing development were still “a marathon away” from delivering the government’s target of 1.2 million new homes.

With Queensland’s rental vacancy rate at just 0.9%, the REIQ said the budget contained no immediate measures to boost the supply of rental properties or help first home buyers enter the market.

“If you were an Australian looking for some glimmers of hope to be able to buy your first home, there are none to be found in this budget,” Mr Milton said.

He said the budget surplus presented a missed opportunity for the Federal Government to push for reforms to state property taxes like stamp duty and land tax, which could improve housing affordability.

“It would have been good to see first home buyer initiatives relating to assisting with the deposit gap and expanding the shared equity scheme beyond the current 10,000 places a year nationally,” Mr Milton added.

The REIQ’s comments highlight ongoing concerns in the property sector about the impact of high interest rates on mortgage holders, as well as the need for measures to boost housing supply and affordability amid tight rental markets and rising costs.