The 2021-22 Federal Budget has just been released, and with Australia still recovering from Covid-19, the nation was eager to hear the government’s recovery plan. Throughout the pandemic, a number of grants and incentives were introduced by the government, in an attempt to support struggling industries. These grants saw huge savings for buyers and record low-interest rates, making conditions ideal for those looking to buy. So the big question on everyone’s lips, will Treasurer Josh Frydenberg continue to support these incentives, or is it time to say goodbye?
Luckily for potential property buyers, the Federal Budget has tipped the housing market in your favour. With the introduction of new grants and the extension of a number of existing incentives. This is great news for first homeowners, who now have access to even more grants than before. Some of the Federal Budget wins for our potential buyers include:
Home Builder Grant
The government has given applicants of the HomeBuilder Grant an additional 18 months to begin construction. As Covid-19 saw significant construction delays, this extension will allow those who have already applied for the HomeBuilder Grant an extra year to begin construction. The HomeBuilder Grant was introduced during the pandemic in a bid to stimulate the struggling construction industry. This grant saw unprecedented popularity with over 120,000 applicants. This extension will give builders time to commence construction without having to worry about the grant’s imminent deadline. This news will also be a sigh of relief for the industry protecting close to one million construction jobs. It also aids the industry as there have been many delays in sourcing and shipping materials from overseas.
New Home Guarantee
The New Home Guarantee scheme will be extended to provide an additional 10,000 allocations to first home buyers. This scheme allows first home buyers the opportunity to build or buy a newly built home or off-the-plan apartment with a 5% deposit. The government then pays the remaining 15%, so first home buyers can avoid the cruel LMI (lenders mortgage insurance) scheme. Making it more affordable for first homeowners to secure a property.
Family Home Guarantee
10,000 Family Home Guarantees will be available. Allowing single parents with dependent children to purchase property with just a 2% deposit. This is available to any type of buyer (not just first homeowners), and applies to existing and new homes. This is a huge win for single parents, as it relieves the burden of saving for a 10 or 20% deposit. Making homeownership more accessible and affordable. With the government guaranteeing up to 18% of the property purchase price, without the applicant having to pay an LMI. To be eligible for this scheme, applicants must have a dependent, not currently own a property (but can have previously been a homeowner), have an income <$125,000, and be an Australian citizen over the age of 18.
First Home Super Saver Scheme
First Home Super Saver Scheme allows first home buyers to withdraw their voluntary superannuation contributions to put towards their homes. The withdrawal limit has increased from $30,000 to $50,000, allowing people to put their super towards a property purchase and to hopefully, ease the burden of saving for a deposit.
The government has also tweaked the super contributions allowing when selling your home. If you’re over the age of 60 and sell your home, you can now make a one-off, post-tax contribution of up to $300,000 per person, to your super. This is aiming to push people to consider downsizing their homes to free up the market and increase the number of listings of larger homes for younger families.
Government incentives, low interest rates, and a spike in buyer demand have all contributed to a huge boom in the housing market. The Federal budget’s new grants, incentives, and schemes are expected to provide $30 billion to the construction industry. However, this will only drive short-term demand. With many people unable to travel, saving during the pandemic whilst also experiencing job security property demand increased. There is also an expectation that interest rates will remain low until 2024, meaning the property demand will only continue to spike.
What This Means For You
For those considering getting into the property market, with new and extended grants available, this might be the perfect time. Depending on your eligibility, you could see huge savings thanks to the government’s continued support. On the other hand, if you’re thinking of selling, increased demand and high clearance rates mean it’s a seller’s market.
If you’re interested in capitalising on the incentives from the budget then check out our current projects. Our Woodlands and Burwood La Frank projects are currently under construction. We also have two projects in the pre-construction phase that is available for purchase in Carnegie and Oakleigh. You can maximise the most savings by purchasing these projects now, so why not take advantage and save!
If you have any questions or want to stay up to date with the latest news in the property market, subscribe to our blog.