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Election promises and budget reforms: What it means for South Australian housing market

Posted in Real Estate
14 Apr 2022
Election promises and budget reforms: What it means for South Australian housing market Photo

As the rental market stretches families and many struggle to take that first step onto the property ladder, state election promises, and the 2022 federal budget offer a glimpse of hope.

Everyone we meet in our work at Timms have their own reason and story for buying, selling, leasing, or renting property.

Those stories are often filled with lots of emotion. In most cases families arrive at this juncture, excited to meet the next chapter of their lives. 

For others, this turning point isn’t quite as smooth. As families search for a home in a very competitive property rental market and significant sales price growth in the last year, many have experienced frustration and disappointment. 

It is this circumstance which has led our newly elected state government to campaign for reform, as well as the federal government to introduce measures in the 2022 budget.

Here’s our snapshot of what you can expect and can now apply for with these changes.

State election promises set to relieve some pressure of rental market

The recently elected government had a few key housing policies as part of their election platform:

  • $181 million over four years to invest in public housing, including 400 new homes, 350 homes to be upgraded and made ready for habitation and maintenance work on 3,000 existing homes
  • $2 million each for selected charities who work with homeless people, including Hutt Street Centre, St Vincent de Paul and Catherine House
  • An expanded low deposit loan scheme through HomeStart finance to assist first home buyers building a new home or buying a recently constructed home

If successfully implemented these policies may take some of the pressure off the rental market, improve support for those who are experiencing homelessness and help to improve the supply of homes in the economy.

Federal budget tax and mortgage insurance relief good for first home buyers without much overall market impact

The federal budget seeks to address housing issues, with the following announced:

  • The number of places available under the Home Guarantee Scheme has risen to 50,000, including a package for regional Australia.  The scheme enables first home buyers to access loans with a 5% deposit without incurring lender’s mortgage insurance.
  • Changes to the First Home Super Saver Scheme that will allow first home buyers to use their (concessionally taxed) superannuation fund to save for a deposit of up to $50,000.  This is an increase from $30,000.  Income eligibility and price caps apply to this scheme

These schemes are unlikely to have a significant impact on the housing market overall due to the limited number of places available and the price caps applicable to the schemes.  

Reserve Bank still holding on interest rates

The Reserve Bank of Australia met recently and decided to keep interest rates on hold.  While some commentators have suggested that interest rates may rise in the next few months, the Reserve Bank has said that it wants to see evidence that inflation is sustainably within the 2 to 3 percent target range. It will continue to set policy to support full employment in Australia.

Whether it’s a routine price update or to discuss making a move, CALL US today. You’ll love the Timms experience!