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2011 Budget overlooks housing affordability

2011 Budget overlooks housing affordability

Treasurer Wayne Swan’s 2011-12 federal budget failed to provide solutions to Australia’s housing affordability crisis, according to the Real Estate Institute of Australia (REIA).

REIA President David Airey expressed disappointment that the government had rejected REIA’s pre-budget submission, which suggested a review of the First Home Owner Grant and a scheme to allow people buying their first home to use their superannuation to purchase a property.

ABS figures reveal that first homebuyers currently represent only 14.9 percent of the housing market, the lowest rate since June 2004 and down from 27.1 percent a year ago.

Mr Airey said the national housing shortage of 200,000 homes is set to grow and that first homebuyers need practical solutions to give them a leg up on the property ladder.

He added that while not the complete disaster the REIA was anticipating, the new budget would not stave off the expected RBA interest rate rises in the second half of the year, which will also impact the critical state of housing affordability.

The budget also slashed the number of affordable rental homes to be constructed under the National Rental Affordability Scheme from 50,000 to 35,000 per year, with the majority focused in disaster-affected areas. Housing Industry Association economist Matthew King labelled the move “absurd and nonsensical” in an economy where householders face rising costs for power, insurance, food and fuel.

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