This is what Treasurer Josh Frydenberg claimed in his third Federal Budget this Tuesday.

Backed up with data, it is observable that Australia’s response to the global pandemic has seen to be one of the most excellent if compared to its neighbouring countries. To date, over 2.5 million doses of vaccine have already been administered. One of the hopeful assumptions of the Australian government is the achievement of vaccination rollouts by the end of 2021. Hence, the government is allocating a $1.5 billion budget in extending a range of health responses to assure the protection of its citizens.

Its effectiveness in the health sector clearly aided the country in gradually regaining its economy back to the pre-Covid levels. In figures, a growth of 4.25 percent in Australia’s economy is expected in 2021-2022. The unemployment rate has fallen swiftly, too, and is expected to recover five (5) times quicker than the last recession in the 1990s. To be specific, Australia’s current unemployment rate is 5.5 percent, which is set to be reduced to 5 percent in 2021-2022 and hit by 4.75 percent by 2022-2023.

With a better healthcare system, economy, and employment opportunities, what’s in it for Australian real estate then?

Hail, homebuyers! Aside from the mentioned sectors, one of the “winners” this year, as concluded this Tuesday, is the field of real estate. Despite the continuous rise of property prices for a period of thirty-three (33) years, Frydenberg stated that “under the Coalition, homeownership will always be supported”.

 

 

Based on information available from the Real Estate Institute of Australia (REIA), here’s a wrap up on the programs and schemes which both the first home buyers and downsizers  can take advantage of:

First Home Loan Deposit Scheme

In 2021-2022, the Federal Government is expanding the First Home Loan Deposit Scheme to another 10,000 places in recognition of the significance of the residential construction sector. Under this, a first time homebuyer who will secure one of these 10,000 dwellings will only need to deposit five (5) percent, initially, and the remaining fifteen (15) percent will be taken care of by the government at the time of purchase. 

As prices for housing continue to rise, this scheme will beneficially help younger homebuyers to enter the market sooner. 

First Home Super Saver Scheme

The expansion of this scheme from releasing $30,000 to $50,000 of their superannuation to purchase a home, seems like a great perk for eligible first home buyers in closing their deposit gap. This will officially be applied starting July 01, 2022.

Family Home Guarantee

In association with the First Home Loan Deposit Scheme, Family Home Guarantee aims to help single parents with dependents in securing a home, regardless if they are first home buyers or have already purchased a unit before. 

Under this program, for as low as two (2) percent deposit, single parents will have the opportunity to build their new homes or purchase an existing unit. Application for this will start on July 01, 2021, which will offer 10,000 places over four years.

Reinsurance Pool

To support and protect Australian homes from unfortunate weather events such as floods and fire, a $10 billion-dollar budget is allocated to mitigating uncontrollable climate phenomena. The amount is assumed to reduce insurance premiums by around $1.5billion for 500,000 policyholders and will create room for selling among the properties.

Downsizer Incentive

Since aged care is a major focus on Frydenberg’s budget with a set amount of $17.7bln, the introduction of superannuation incentives for Australian retirees and aged people is also being pushed through. From age sixty-five 65, Australians have the capacity now to make a one-off, post-tax contribution of up to $300,000 per person (or $600,000 per couple) when they sell their home, as early as 60 years old. 

In the event that retirees own their own homes and they don’t want to sell their property, they still can get some extra cash each week by borrowing against the value of their property.

“Shop Local” campaign

The federal government is setting aside a budget to continue supporting small businesses and family-owned businesses. $8 million will be allocated to fund a nationwide campaign on “shop local”. Small Business Minister Stuart Robert announced that this two-year campaign will help support SMEs as they continue to recover from the economic downturn brought by the Covid-19 pandemic. He also added that small and family businesses are significantly contributing to the government’s economic recovery plan. 

Through this, too, people will have a solid source of income that they can use in securing a property.

Some of the other sectors which receive major amounts of funding include aged care ($17.7bln), city and regional infrastructure ($15.2bln), tax concessions for low- and middle-income earners ($7.8bln), women’s safety and economic participation ($3.4bln), digital economy strategy ($1.2bln).

Sellers and buyers in the field of real estate seem to have a “win-win” situation for the 2021 Federal Budget. Our team at 4one4 Property Co. is ready to welcome homebuyers to maximize these schemes. Even if the year 2020 has been a tough year, the Australian government seems to be standing tougher. Indeed, “Australia is coming back.”