2017 federal budget addresses housing affordability

By Michael Mata



The 2017 federal budget included a range of measures to address housing affordability with both supply and demand measures.

Listed below are some of the budget’s highlights:

Unlocking greater supply

The federal government aims to boost the supply of housing and encourage a more responsive housing market by:

  • Providing $1bn to fund critical infrastructure, such as water infrastructure, to help speed up the supply of housing
  • Working with the states to deliver planning and zoning reform to expedite development
  • Releasing suitable Commonwealth land, beginning with Defence land at Maribyrnong in Melbourne, for housing development
  • Investing more than $70bn from 2013-2014 to 2020-2021 on transport infrastructure across Australia
  • Specifying housing supply targets via new agreements with the states and territories

Implementing incentives

The federal government is creating incentives to improve housing outcomes, including:

  • Helping first-home buyers save a deposit via voluntary contributions into superannuation
  • Reducing barriers for retirees attempting to downsize to free up larger homes for young families
  • Improving the targeting of housing tax concessions
  • Strengthening the capital gains tax rules to ensure that foreign investors are paying their fair share of capital gains tax
  • Reforming foreign investment rules to discourage investors from leaving their property unoccupied
  • Supporting economic growth and the jobs market to boost real wages

Improving regulator tools to address risks to the housing sector

The federal government is working to ensure that the Australian Prudential Regulation Authority (APRA) is able to respond with greater flexibility to financial and housing market developments that pose risks to financial stability.

This includes giving APRA new powers over the provision of credit by lenders outside the traditional banking sector. The government also recognises that housing pressures and risks may not be uniform across the country. As a result, the government will give APRA the ability to use geographically-based restrictions on the provision of credit where APRA considers it appropriate.
 

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