By Grace Frost
The 2023 Federal Budget will do minimal to address the long-term impact of housing availability and affordability, according to Garry Harvey of The Property Guy, as buyers and renters continue to struggle in the City of Whittlesea.
The Budget outlined numerous strategies to address the cost-of-living, including an increase to the rental assistance cap, a reduction on withheld tax by 15 per cent on build-to-rent projects, and changes to the Home Guarantee Scheme allowing eligible family and friends to buy together.
Member for McEwen Rob Mitchell said the budget also outlined investment in social and affordable housing, including the previously announced $10 billion pledge to the Housing Australia Future Fund, which will aim to build 30,000 new social and affordable homes in five years.
But Mr Harvey, who owns 29 investment properties and educates investors through his business, said despite the strategies supplying short-term assistance and relief in the current market for low-income earners, the Budget failed to address ‘the fundamental problem’.
Renters in the City of Whittlesea have been hit hard by rent costs, with the median weekly payment increasing in all but one of the municipality’s suburbs by an average of 5.9 per cent over the past 12 months.
Mr Harvey said the increasing demand for housing and limited supply was driving up rental costs, and the budget failed to address the problem with a long-term strategy.
“The basic law of supply and demand is pretty obvious at the moment, and there’s more demand for rentals than there is available,” he said.
“Something has to change to make it more attractive for people to supply more rentals.”
Mr Harvey said the government should have incentivised the suppliers of investment properties to ‘want to play in the rental space’, which he said would work towards addressing the housing crisis by adding rental properties to the market.
“Your average investor is not a multi-millionaire, it’s a family, trying to create something for their future. If you make that process more difficult, then they will often opt out and move to a different sector [to invest],” he said.
“You’ve got to provide incentives for them to want to [rent out their property] and make it a good investment space. I think in recent times, a lot of policies are working against that.
“Land taxes for example are having the reverse effect of what [the government] are telling us they’re trying to achieve.”
Mr Mitchell said the Budget’s primary focus was on delivering help to those who needed it most, benefitting the region by putting more individuals on the payroll and giving them the ability to afford a home.
“If you’re sitting there and saying the shortage is the problem, you actually then have to admit that this budget is doing everything for that. We’ve got a whole range of things we’ve [put] into the housing industry because we know that is the problem,” Mr Mitchell said.
Mr Mitchell said the Home Guarantee Scheme would allow for single and adoptive parents, as well as those who hadn’t owned a home in the past 10 years, to secure a home.
“By expanding the Home Guarantee Scheme, so far, 835 individual applications have been received in our community,” he said.
Mr Harvey agreed with Mr Mitchell the buy-to-rent tax relief was a ‘step in the right direction’, and the Home Guarantee Scheme changes would allow more people to buy a home.
But he still worried the lack of detail on the building of social and affordable housing would see no improvements in the housing crisis.
“We hear that word ‘affordable’ thrown around a lot from the politicians, but what does that mean? I’ve never heard anyone put a dollar figure on it,” he said.
“[The Budget] didn’t do anything other than help larger developers and address short-term cost-of-living.”
