josh frydenberg budget 22
Josh Frydenberg delivering the budget last night. Image – Parliament House Live.
  • Josh Frydenberg handed down the 2022-23 Federal Budget last night
  • Many major policers were already announced
  • The increase of lending to Community Housing Providers has been welcomed universally

Last night, Federal Treasurer Josh Frydenberg delivered what will be the last budget before the election, which will be called within the next few weeks.

As is common practice, many significant policies were announced – either formally or informally – before Mr Frydenberg tabled his budget. One-off payments for welfare recipients, temporary cut to fuel excise, and enlarged tax offsets for low and middle-income earners were all expected, and didn’t raise eyebrows when addressed.

In terms of property-related initiatives, the extension of the Housing Guarantee – including specific places for regional Australians – was already announced and received near-universal support. Given the influx of people trading urban lifestyles for regional,

Many key property players waited until Mr Frydenberg’s speech last night to formally respond to the budget.

PIPA Chair welcomes home guarantee

Nicola McDougall Female Investor
Nicola McDougall, Co-author of The Female Investor. Image – Supplied

Nicola McDougall, Chair of the Property Investment Professionals of Australia (PIPA) – and a contributor to The Property Tribune – noted that while saving for a property has always been difficult, it has been exacerbated by record property prices and cost of living pressures.

Ms McDougall welcomes the home guarantees to ease these concerns.

“The doubling of the Federal Government’s various home guarantee schemes will assist some 50,000 people annually, many of whom may have struggled to achieve home ownership without it,” Ms McDougall said.

“The role that home ownership plays in the creation of household wealth as well as housing security cannot be denied, but record property prices is preventing many people from ever achieving that goal.

“It’s especially pleasing to see the Family Home Guarantee for single parents expanded to 5000 places every year until 2025 because these are the buyers who need assistance the most.

Nicola McDougall, PIPA Chair

“With rental markets critically undersupplied around the nation, helping single parents make the usually difficult transition from being a tenant to a homeowner will make a significant difference to their lives as well as to the lives of their children.”

Ms McDougall pointed to research that shows by 2056, the rate of homeownership for over-65s in Australia will decline from 76% to 57%.

“These declining rates of homeownership may see more people spending their twilight years living in poverty, especially women and men who may never had the chance to purchase their own home due to being a single parent.”

Community Housing Provider cap increased

One property-related aspect of the budget that hasn’t gathered much attention is the increase in the liability cap that the National Housing Finance and Investment Corporation (NHFIC) lends to Community Service Providers.

This has more than doubled from $2 billion to $5.5 billion. Between $300 million and $400 million is expected to be saved thanks to lower interest costs.

Social and affordable housing peak body PowerHousing Australia CEO, Nicholas Proud, welcomed the announcement, adding the cap increase maximizies the sustainability and longevity of the community housing sector.

“We are pleased that the Federal Government has listened to PowerHousing Australia’s calls to increase the cap to tackle additional demand arising from massive price increases in rents, dwelling prices and flood related pressure on dwelling availability.

“But there is still so much more to do”

“What will be a pivotal election issue will be the sheer lack of affordable rentals and this is the key area of focus in the 2022 Federal Budget to assist this group of people today.

Nicholas Proud, PowerHousing Australia CEO

“This lower interest rate and certainty beyond smaller refinancing has been a game-changer that to date has seen over 23 of PowerHousing Australia’s 36 CHP Members being able to provide more housing for less cost and opened the door in institutional investment partnerships.

Mr Proud noted that community housing provider SGCH is expected to realise around $100m interest savings over the 10-year term of its current $475m loan facility with NHFIC.

“Whilst there is a need for the continual review and adjustment of the cap to meet needs as they change and to lock this in to create certainty, this announcement tonight is a significant boost,” he added.

“We are far from out of the woods though and greater numbers of social and affordable homes are needed today more than ever and the concept of a capital aggregator and a national plan must be announced next to alleviate housing pressures from an incoming Federal Government.”

Property Council of Australia Chief Executive, Ken Morrison, also praised the new liability gap – but reiterated supply-side concerns.

“It was very pleasing to see in this budget that NHFIC will secure an additional $2 billion to help boost investment in affordable housing,” said Mr Morrison.

“While the HomeBuilder scheme saved jobs and delivered great benefits to households, the record pipeline of work it created will come to an end just as our population begins to recover, which will intensify the supply crunch we know is coming,” Mr Morrison said.

“Both HomeBuilder, and the expanded Home Guarantee Scheme are welcome demand-side measures, and cannot address the supply-side issues which increase the cost of new homes.

Ken Morrison, Chief Executive Property Council

“The Government’s own forecasts from the National Housing Finance and Investment Corporation (NHFIC) predict that housing supply is set to drop by 35 per cent right at the time population growth would resume, leading to a national deficit of 163,400 homes by 2032.

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