Budget 2020: $1bn to assist first-time buyers

Josh Frydenberg will free up more than $1bn to build more affordable housing and will help Indigenous Australians buy their first homes.

The National Housing Fin­ance and Investment Corporation will issue an extra $1bn in bonds to community housing providers on top of the $3bn already available. Picture: istock

Josh Frydenberg will free up more than $1bn to build more ­affordable housing and will help Indigenous Australians buy their first homes as the nation faces an 11 per cent slump in housing investment this financial year.

The National Housing Fin­ance and Investment Corporation will issue an extra $1bn in bonds to community housing providers on top of the $3bn already available, in an attempt to neutralise Labor’s attempts to make social housing a key election issue.

“These reforms complement the government’s announced changes to Australia’s lending laws, which will support the flow of credit to housing, reducing the time and cost associated with ­accessing credit for consumers,” the papers say.

The government will also inject $150m over three years into the Indigenous home ownership program.

“This measure will assist Indigenous Australians to access housing and support the delivery of the government’s Closing the Gap targets, while providing an immediate, targeted fiscal stimulus to regional Australia by injecting liquidity into the financial and construction sector and generating positive flow-on effects for regional businesses,” the ­papers say.

The increased spend on social housing may help to boost the construction sector, which is set to face a dried-up pipeline of projects in the coming financial year as the lack of international students and slow business investment ­affect planned major CBD builds.

Anthony Albanese, who has made increasing social housing a key focus of his leadership since he took over Labor after last year’s election, is expected to reveal more on his housing plans in Thursday’s budget-in-reply.

The housing budget will increase by nearly $2bn this financial year, partly due to the $680m Homebuilder scheme in which homeowners are eligible for $25,000 grants for new builds and renovations.

The extension of the First Home Deposit Scheme will also help 100,000 young Australians to spend close to $1m on their first home with a deposit of as little as 5 per cent.

The next phase of the deposit scheme will apply only to newly built properties to help boost the economic recovery and will run from the first week of October to the middle of next year.

Dwelling investment is expected to fall even further in the September quarter as the second Victorian wave of the coron­avirus hits apartment builds in ­Melbourne.

The budget papers say Homebuilder, the extension of the Home Deposit scheme and a boost to affordable housing will see investment rebound in the next year by 7 per cent.

“Further declines are expected in the September quarter as commencements continue to slow and stage-four restrictions in Melbourne reduce the level of activity.

“Early indicators of demand for new housing construction and liaison with industry suggest the Homebuilder scheme in conjunction with other housing policies and low interest rates is pulling forward demand and will provide notable support to activity in late 2020 and into 2021.

“Dwelling investment is forecast to rise by 7 per cent in 2021-22.”