Economist, however, cautions that housing shortages may worsen before improving
Digital property exchange platform PEXA Group has welcomed the housing initiatives presented in the Federal Budget by the Albanese government, set against a challenging economic environment characterised by high inflation and increased national debt.
Julie Toth (pictured), chief economist at PEXA Group, lauded the government’s focus on housing despite the challenges, but cautioned that the housing shortage might initially worsen.
“The additional measures and funding announced in this week’s Federal Budget are very welcome – $1 billion in new funding will make a real difference to urgently required crisis and transitional housing across Australia,” Toth said. “Future support for trade apprenticeships, essential urban infrastructure and purpose-built student housing, will help reach the government’s Housing Accord ‘stretch-target’ of 1.2 million new homes.
“However, we remain concerned about Australia’s immediate housing shortage. The government’s first annual NHSAC report predicts Australia’s housing shortage will worsen until around 2027, due to rising population, diminishing household sizes and construction supply constraints.
“This imbalance will eventually improve as demand growth slows and construction capacity increases. Unfortunately, in the meantime housing affordability for buyers and renters is likely to deteriorate further.”
PEXA welcomes the Federal Budget housing policy measures to stimulate housing supply and tackle the ongoing rental housing crisis but we note more needed to be done to address the nation’s long-term housing shortage. Read more:https://t.co/OYk7bHQ03k pic.twitter.com/kZCz0bTXTl
— PEXA (@PEXA_Group) May 10, 2023
The budget includes substantial allocations aimed at addressing urgent housing needs: $1 billion for crisis and transitional accommodation, another billion to enhance state and territory infrastructure for new housing, and doubled funding for homelessness services, now totalling $9.3 billion over five years.
On the regulatory front, the budget confirms the commencement of stricter anti-money laundering measures involving real estate transactions, with $166 million allocated for AUSTRAC’s implementation and sector education.
These measures, according to Toth, signify a robust commitment to improving long-term housing availability and affordability, as well as enhancing the financial integrity of Australia’s vast real estate market.
“PEXA welcomes this year’s budget measures to improve Australian housing supply, affordability and financial integrity, now and over the long-term,” Toth said. “We commend the government for prioritising these housing issues in the current economic climate.
“We know that resolving Australia’s housing availability and affordability problems is complex. All levels of government must pull in the same direction to actively support industry and community initiatives. No single measure or organisation can solve this housing shortage alone.”
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