PowerHousing Australia is pleased to see the Federal Budget delivered tonight focusing on housing with the Housing Accord, the core election commitments and much more.
Australian households are at the crossroads with interest rates rising at levels which will push Australians into crisis over the next financial period and a deep national policy focus was needed here.
Housing stress in the rising interest rate environment is very real for increasing numbers of Australians, but the announcements of the Federal Budget will start to see housing play a more central role with all Australian Governments committing to partner with industry and investors to see more social and affordable housing delivered.
The Housing Accord will see State and Federal Government commit to an additional 20,000 social and affordable homes starting 2024 which will require partnerships to see additional housing options.
The opening up of the National Housing Infrastructure Facility will open up an additional 5,500 homes, which accompanied to other policies such as the 30,000 home Housing Australia Future Fund, will see community housing supporting a large pipeline of housing that is desperately needed.
Rents are set to continue to rise amidst the tightest rental market in recent memory and as the budget papers show there is an additional 160,000 people expected to call Australia home by June 2024 than previously forecast by way of Net Overseas Migration and this will provide upward pressure on housing.
Mortgage holders are increasingly at risk of interest rate shock in over the next year as 2/3rds of all fixed rate mortgages are reset to higher rates over the next 14 months.
There is also a fixed rate refinancing shock with the indicator 3-year fixed mortgage rates having increased from 2.25% in September 2020 to 6.05% in October 2022. The markets are pricing in a further increase in interest rates of 1.5% over the next 12 months. With around 35% of outstanding mortgages are currently on fixed-rates, and around two-thirds of these loans are due to expire by the end of 2023.
This budget can provide further comfort to those particularly in rental stress that we are past the worst of the crisis and stable housing equilibrium is coming. The Accord can bring all investors, superannuation funds, developers, market, affordable and social housing (CHPs) to the table, to consider the whole housing continuum. This budget also effectively doubles the previous commitments made at the election to see 55,000 homes delivered from 2024.