No announcement on HomeBuilder was made in the budget. Housing Minister and Assistant Treasurer Michael Sukkar told journalists on Saturday: Any decisions around HomeBuilder, whether it would be extended, are things well keep a very close eye on between now and its end date on 31 December.
No budget announcement on HomeBuilder: Housing Minister Michael Sukkar. Alex Ellinghausen
The budget did include an extension of the First Home Loan Deposit Scheme, with another 10,000 packages specifically for new homes, and with higher price caps.
Stockland managing director Mark Steinert told the Property Councils Budget Insights event yesterday that the extended First Home Loan Deposit Scheme would be an incremental help but that HomeBuilder was the easiest way to stimulate the economy and needed to be extended.
But here is the issue: Australia is not short of new housing, not after the recent boom.
Treasury, which is forecasting a 7 per cent rise in housing investment in 2021-22, reported that HomeBuilder, along with other housing policies and low interest rates, is actually pulling forward demand.
At the same time, one of the fundamental drivers of new housing demand population growth has stopped, largely due to the collapse in migration as shown in todays graph from the ANZ.
Treasury now expects record low population growth of just 0.2 per cent in 2020-21 and 0.4 per cent in 2021-22. According to the budget papers, the change is not a blip but a permanent lowering of the medium-term rate of population growth.
Before the pandemic, the country was on track for more than 30 million people by 2030-31. The population will resume growth later this decade, but on Treasury estimates will now fall short of that 30 million expectation.
Fewer new people need fewer new homes. The Morrison governments National Housing Finance and Investment Corporation (NHFIC) last month estimated that the demand for new housing would drop by 129,000 to 232,000 dwellings over the next three years.
Property Council chief executive Ken Morrison, who welcomed many of the new measures in the budget, said the delayed population restart was a key risk to Australias recovery and critical for the residential construction industry.
Social housing
Growing our population again will be essential to realising the budgets forecasts and requires Australia to safely and methodically begin to reopen our borders to the rest of the world, he said.
Nevertheless I suspect the Morrison government will eventually have to look elsewhere to keep Australias tradies busy.
It will not be to commercial building. The budget papers pointed to a gradual run-off in non-dwelling construction as demand for new projects declines and work in the pipeline is completed.
Instead social housing, the one sector of Australian real estate which with around 430,000 people on waiting lists and thousands more on NDIS plans remains under-supplied, could be the saviour. But not yet.
Standing on a new housing estate at Googong outside Canberra to launch the latest tranche of the First Home Loan Deposit Scheme, Sukkar did address the social housing question.
The Morrison governments National Housing Finance Investment Corporation has sent $1.5 billion to the community housing sector; there is $100 million with the NSW government for social housing projects; and $16 million with the West Australian government; and the $4.6 billion in Commonwealth Rent Assistance, he said.
Requirement for support
The budget added another $1 billion to the NHFIC Australian Bond Aggregator which helps source low-cost, long-term funding for affordable housing, as well as $150 million for new homes for Indigenous families in regional areas.
Of course theres a role for us to facilitate and assist with social housing, Sukkar said. Its the primary responsibility of the states but we have stepped up more than any other federal government before us, to support social housing.
The chief executive of PowerHousing Australia, Nicholas Proud, said NHFICs $1 billion addition to the bond aggregator pool could support an additional 2500 new and existing affordable homes built and maintained by community housing providers.
He warned that with a fall in net overseas migration, and the likely problems with some of the borrowers who have deferred their housing loans, the requirement for housing support is coming.
More on social housing is expected from Anthony Albaneses Opposition.
For Fehring whose National Affordable Housing Alliance brings together peak bodies including the ACTU, ACOSS, and Industry Super Australia with industry representatives such as the Property Council, Master Builders Australia and the Housing Industry Association the further development of the sector will require a matching of public and private needs.
Through NHFIC, the Morrison government has found a way to help reduce the cost of debt for affordable housing; now the private sector has to find a way to fund the equity.
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