The Morrison government has unveiled a raft of policies in the federal budget aimed at tackling Australia's housing affordability crisis, which has seen average property prices in Sydney reach $1.3 million. Key measures include a downsizer scheme, a Family Home Guarantee for single parents, and expanded first-home buyer support.
The downsizer scheme, which allows retirees over 65 to contribute up to $300,000 from the sale of their family home into superannuation, will be extended to those aged 60 and over. Treasurer Josh Frydenberg said the move is designed to help Australians maximise their retirement savings while freeing up housing stock.
The Family Home Guarantee will provide 10,000 guarantees over four years to single parents, enabling them to purchase a home with a deposit as low as 2%. Additionally, 10,000 places will be added to the Home Loan Guarantee Scheme, allowing first-home buyers to secure a mortgage with a 5% deposit.
However, economists warn that these demand-side measures may not address the root cause of the crisis: insufficient housing supply. Professor Richard Holden of the University of New South Wales noted that while the downsizer scheme might free up some stock, it is unlikely to significantly impact broader house prices. Felicity Emmett of ANZ added that stimulating demand could push prices higher.
The government's policies come amid record-low interest rates and a chronic shortage of new homes, with supply failing to keep pace with demand. The Reserve Bank has indicated that low rates will persist to support employment, further fuelling property price growth.
