"Australia is coming back" – with these words, the Treasurer Josh Frydenberg introduced that the Federal Government plans to inject $76 billion to rebuild the Australian economy.

The "Pandemic budget", as it has been called, highlights the importance of the Government’s efficient spending to pave Australia's road to recovery. The main goal is tackling unemployment and keep the rate below 5%.

In relation to Property Investments, there are massive incentives towards making housing more accessible, with first-home buyers allowed to use up to $50,000 from their super funds to contribute to the property purchase and a unique new scheme for single parents. The Government has also committed to a $110 billion plan to boost infrastructure projects across the country over the next ten years.

Let's have a look at the proposed investments to keep the economy and the real estate sector moving:

IMPROVING HOUSING ACCESSIBILITY AND BOOSTING CONSTRUCTION

First Home Super Saver Scheme: First-home buyers will be able to release $50,000 from their super funds for owner-occupier purchases. Currently, the maximum withdrawal is $30,000.

Family Home Guarantee – Single parents: the scheme allows 10,000 single-parent families to purchase a home with a deposit of only 2%, with the Government to guarantee the other 18% of the deposit.

First Home Buyers - First Home Loan Deposit Scheme will release extra 10,000 places, allowing people to buy their first home with a deposit of as little as 5%, with the Commonwealth backing some of their mortgages.

Home Builder – Construction deadline extended – Those who have already applied for the HomeBuilder Grant will have extra 18 months to start the construction.

Age Reduction for Downsizer Scheme – To encourage older people to sell their family home and consequently release stock for younger generations, the Government plans to reduce the age criteria of the Downsizer Scheme. The scheme allows older people to put up to $300,000 from their family home sale in their superannuation account. The minimum age will be reduced from 65 to 60.

INVESTING IN VICTORIAN INFRASTRUCTURE

Melbourne Intermodal Terminal - The federal Government is committed to contributing to the construction of a new hub to accommodate present and future inland rail services., which can potentially cut travel times and result in "5,500 truck movements coming off the roads every day".

The location is yet to be decided. Truganina in the city's West or Beveridge, about 40 kilometres north of Melbourne, are among the options.

Pakenham and Monash Road Upgrade – An extra $380 million for road upgrades will be destined for Pakenham, Melbourne's outer south-east, and $250 million for Monash Freeway upgrades in Berwick. Both constructions had been already announced.

MACROECONOMIC ASPECTS AT A GLANCE

Interest Rates are the lowest in history and are expected to stay low until at least 2024, increasing homebuyer activity and inviting investors back to the property market.

Simpler lending rules are now in place, increasing the flow of credit to households and making property purchases more accessible.

The Consumer Confidence index in Australia recorded its highest level since 2010, in April 2021.

House Prices have demonstrated the resilience of the property market in Australia. The total value of Australia's Real estate has topped 8 trillion, which represents "more than the gross domestic product of more than 99% countries on Earth".

Australia is one of the 9 countries in the world to hold a AAA Credit Rating from all the three major credit rating agencies.

IN SUMMARY

A strong property market reflects a strong economy. The recent increase in housing prices amongst the capital cities is a result of a combination of aspects: rising demand, job stability, improved savings during the pandemic and the overall confidence in Australia's growth.

Although some sectors are still facing difficulties, such as aviation, international education and tourism, the results achieved so far are better than anticipated: almost 1 million job positions were created or restored since May 2020 and Australia’s debt has reduced significantly.

Since the beginning of the pandemic, State and Federal Governments have taken extraordinary measures to support economy and improve the livelihood of Australian People.

Contrary to the pessimist forecasts, the unemployment rate is lower than pre-pandemic levels, and Australia has seen a rise of 1 trillion dollars in its residential real estate value.

TEAM SONI CAN HELP

At SONI, we simplify property investment with our experience and knowledge. Whether you are looking to buy your First Home, your First Investment Property or to build on to your existing Portfolio, our team of experts are here to help.

Reach out to us today if you are looking for the right partner that is going to be there with you every step of the way.

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