Stamp duty cuts, serviceability buffers, housing supply lead the wish list
Within the space of a week, Aussie voters have been given a Labor Budget to chew on, a Coalition Budget Reply to digest, and an election date to salivate over.
Labor Treasurer Jim Chalmers’ pre-election Budget on Tuesday came with a few bells and whistles in the form of moderate tax cuts and a Medicare levy reduction, though it was criticised for being light on policies that address the pressing issues on housing supply, cost of living and labour shortages.
That being said, Chalmers did announce that the Help to Buy scheme for first-home buyers will be expanded, with $800m allocated to increase price and income caps.
He also announced a temporary ban on foreign property purchases in a bid to shore up domestic supply.
As was widely expected, an election call followed on Friday, when Labor leader Anthony Albanese (pictured) announced that we’ll be going to the polls on May 3, effectively kicking off a month-and-a-bit-long election campaign.
Betwixt the Budget and election call, Liberal Party leader Peter Dutton dropped a Budget Reply focusing on energy prices and an Elon Musk-lite bid to sack 41,000 public service workers.
He promised to cut down migration, which he believes will help to alleviate Australia’s housing shortage, although there we no concrete policy plans announced.
What brokers want
More posturing will undoubtedly come in the weeks ahead, but what does the mortgage broking industry hope to see from the next Prime Minister, whoever that may be?
“I would love to see the government introduce legislation aimed at increasing housing supply in key areas. By reducing stamp duty for new homes (not just first-home buyers) and providing tax concessions for construction, we can create a more favourable environment for housing development,” said Andrea Svenson, director, finance broker at Empire Finance Co.
Mario Reyad, director and lending specialist at NSW-based Expert Mortgages, is hoping for a “more dynamic approach” to the serviceability buffer.
The current 3% buffer, Reyad noted, means borrowers need to be able to service their loan at 9% and above. “This drives a lot of people out of the market and forces them to rent for longer (which adds more inflationary pressure) and potentially never own their own home especially if they don’t meet the eligibility for one of the government schemes.”
Cost of living “is a real issue we are seeing with our clients and this affects all types of borrowers whether it be mums and dads, investors or first home buyers”, Reyad added. “excluding student loans such as HECS debts will give these first-time borrowers a leg up in securing their first home and will be a nice addition.”
Grace Taylor, director, mortgage broker at Queensland-based Taylored Finance Co., agreed that serviceability buffers should be looked at.
Taylor said: “We urge the Prime Minister to reduce current assessment buffers as these changes will foster a more favourable lending environment – enabling clients to secure better financial positions.
“Additionally, we seek policies that support small business clients in purchasing homes by promoting financial market stability, encouraging investment, and driving sustainable economic growth to strengthen overall market confidence.”
Taylor would also like to see the issue of clawbacks addressed. “These are hurting brokers and often these are completely out of the brokers’ control. Clawbacks need to be reduced to one year max and waived for sale of houses.”
Rishi Bhatia, director, mortgage and finance broker at Victoria-based KRIA Mortgage managers, would like the government to continue supporting first-home buyers while keeping negative gearing and capital gains taxes as they are.
Additionally, Bhatia would like to see the PM “streamline compliance for mortgage brokers – the burden of proof relies on brokers so if the financial services ministry can make it an easier process, without compromising safety and security – that will be great”.
Albanese’s pledge to expand the Help to Buy Scheme “is a step in the right direction, and will assist more buyers by lowering deposit hurdles, while higher income caps make the scheme accessible to more individuals, couples and families”, Mark Haron, executive director of mortgage aggregator Connective, said in comments emailed to MPA.
He added: “Further support through the First Home Guarantee and Regional First Home Buyer Guarantee also addresses one of the biggest barriers to entry: saving for a deposit.
“At a time when cost-of-living pressures and high interest rates are impacting household budgets, having more financial flexibility can make a significant difference for buyers. These measures offer more options for those who might otherwise struggle to enter the market.”
Peak industry body reacts
Anja Pannek, chief executive of peak industry body the Mortgage and Finance Association of Australia (MFAA) had a few positive things to say about Dutton’s Budget Reply.
She welcomed Dutton’s pledge to increase the asset write-off to $30,000 and to make it permanent as well as his pledge of a $20,000-per-year tax deduction for small businesses for meal-related expenses (the latter policy has been robustly ridiculed by Labor and across social media).
“The permanency of the instant asset write-off is something we called for in our pre-budget submission to give certainty to our members in the commercial and asset finance space and to their clients as well,” said Pannek.
“The MFAA will continue to work closely with all sides of government to advocate for our members and the mortgage and finance broking industry,” she added.
