Australia's 2020 budget paid special attention to the residential construction sector and how it can contribute to the country's economic recovery from the COVID-19 pandemic, experts say.
Adrian Kelly, president of the Real Estate Institute of Australia, said the 2020 budget is able to provide "encouraging prospects" to all stakeholders in the property market.
"The Australian Government & # 39; s focus on job creation and re-employment through various budget measures is good news for tenants, investors, landlords and those wishing to sell", did he declare.
Graham Wolfe, Managing Director of the Housing Industry Institute, said the incentives announced by the government, including the expansion of the First Home Loan Deposit Scheme (FHLDS), will help increase home ownership .
"Homeownership is one of the top three issues of greatest concern to Australians – improving homeownership rates through sensible measures and targeted can make a real difference for first-time homebuyers and help the country recover from the current COVID recession, "he says.
Additionally, Wolfe said the expansion of the program will open up the residential construction industry, creating more job opportunities.
"Combined with business investment incentives that build confidence, these measures will be a good way to help Australians in these unprecedented times find jobs and fulfill their dream of working. ; home ownership, "he said.
According to the Urban Development Institute of Australia (UDIA), the housing and construction sectors create approximately 750,000 direct and indirect jobs nationwide.
However, Kelly pointed out a potential concern about the expansion of the program, saying it was a missed opportunity for the government to really encourage more potential buyers. Kelly said first-time homebuyers are more likely to purchase established homes because of their affordability.
"It would have been much better not to limit additional spaces to new construction in terms of economic impacts and first-time buyers' preferences." he said. "The program should be extended to all eligible buyers of all homes, not just new construction."
Tax cuts
Still, Kelly acknowledged the potential effects of the planned income tax cuts on housing affordability.
"Bringing forward and backing the second stage of tax cuts will improve borrowing capacity and housing affordability. This comes at a time when the interest rate outlook will remain low until at least 2023, "he said.
Jane Rennie, Managing Director of External Affairs at CPA Australia, said these tax cuts will help put money back into the economy through individual spending and business investment.
“Many small businesses operate as independent traders and these tax cuts will help them free up cash and reinvest in their business. Of course, tax cuts only provide an effective stimulus to the extent that they translate into increased consumer spending, ”she said.
Regional infrastructure
Another highlight of the budget was the investment in regional infrastructure. Kelly believes this will help spur job creation and local economic recovery.
"Economic activity is predicted to pick up sharply from late 2020 to early 2021, thanks to further easing of COVID-19 containment measures and improved business confidence and consumers, ”he said.
Rennie shared similar ideas, adding that the planned spending for regional Australia is one of the biggest budgets in history.
"Infrastructure spending plays an important role in job creation. It is important to plan for projects in each state and territory that provide short-term economic boost, such as repair and the maintenance of existing public goods, like long-term large-scale projects, "she said.
Population growth
Ken Morrison, Managing Director of the Property Council, said that while the budget included measures that would guide Australia towards economic recovery, it also highlighted concerns about population growth. Morrison said the expected delay in restarting the population could potentially hurt the overall economic recovery.
"The closure of our international borders means that net overseas migration which previously accounted for around 60% of population growth will actually reverse next year for the first time. since 1946, with an exodus of 72,000 people, ”Morrison said.
This is crucial, given the dependence of residential construction on population growth. A UDIA study shows that a decline in net migration abroad is likely to result in an annual reduction of 50,000 homes per year over the next five years.
"Efforts to harness domestic demand and maintain housing construction jobs will be critical to sustaining economic momentum until net outward migration returns to more sustainable levels, "said Simon Basheer, president of UDIA.
