Potential homebuyers may have to deal with a bit of bad news, as the Federal Budget 2022 revealed that house prices in Australia are not likely to drop. In addition to that, rising interest rates may also offer little relief to those looking to buy homes for themselves or for the purposes of investments
While the report does not indicate anything positive in terms of house prices, it does present some new initiatives, such as the Home Guarantee Scheme, which is supposed to aid people in helping get homes. With that said, this article will discuss what the Federal Budget had to say about the Australian real estate market.
Potential Slowing Down of the Rate of Price Growth
The rate at which property prices increase showed some indication of slowing down. The value of homes throughout the country has significantly increased during the COVID-19 pandemic. In the last year alone, the prices of homes increased in certain areas of the country by as much as 30%. While it is certainly good news that the rate of price growth is decreasing, there’s no real indication that the value of homes will decrease. Thus, potential homebuyers who plan to purchase a home this year or in the near future won’t benefit.
Supply Issues May Lead to Better Growth in the Housing Market
There have been various supply issues during the pandemic for materials and labour. Therefore, these issues have also led to an increase in prices for new builds. That, coupled with COVID-19 outbreaks and restrictions related to the pandemic, have also slowed down the process of completing new builds, which, in turn, have led to increases in construction costs. As a result, homebuyers have to pay more money for houses that may have cost less than before the pandemic.
A positive takeaway from the Federal Budget 2022 is that certain supply issues will be resolved. Therefore, there will potentially be a decrease in the overall construction costs for new builds, which could lead to a gradual decrease in the price growth rate. That said, the recent floods in New South Wales and Queensland and the Russian war with Ukraine have also led to complications that have affected home prices in the short term.
First-Time Homebuyers Have Something Positive to Takeaway
The Home Guarantee Scheme is one positive takeaway for first-time homebuyers. This government initiative aims to help support eligible first-time homebuyers so that they can buy their first home sooner than initially planned.
Last Few Words
While the Federal Budget 2022 reveals house prices in Australia are not likely to drop, there were some positive things to takeaway. There’s a clear indication that the housing market in most of Australia is going to grow healthier as this year progresses, with more opportunities for some homebuyers, especially first-timers.