The Albanese Government has unveiled a $15 billion package of welfare increases, rent relief and energy bill assistance in its latest federal budget to tackle the cost of living challenges and the housing affordability crisis. 

The government has announced several measures on the housing front, including an additional $2 billion investment for more social and affordable rental housing by increasing the guaranteed liabilities of the National Housing Finance and Investment Corporation (NHFIC)[i]. 

This boost from $5.5 billion to $7.5 billion, effective July 1, will enable NHFIC to support the building of more social and affordable homes by providing lower cost and longer-term finance to community housing providers through the Affordable Housing Bond Aggregator.

The government is also offering incentives to increase the supply of rental housing by improving taxation arrangements for investments in build-to-rent accommodation.

Rental assistance 

The government has pledged to help around 1.1 million Australians with the rising cost of rent by increasing the maximum rates of Commonwealth Rent Assistance (CRA) by 15% at a cost of $2.7 billion over five years.

Real Estate Institute of Australia President, Hayden Groves, said that whilst CRA was a much-needed measure, housing supply at scale still needs to be addressed. “The widely previewed commitments of the Home Guarantee Scheme rule changes, recommitment to the Housing Accord, an extra $2 billion for the NHFIC mandate and taxation rule changes for the niche Build-to-Rent sector are welcome but will not in themselves address the elephant in the room which is building more homes for Australians. 

“We hope the long-awaited National Plan for Housing and Homelessness puts all options on the table to truly unlock housing supply and the hotly debated Housing Australia Future Fund finally gets off the ground.” 

Help for those with homeownership plans 

From July 1, 2023, the First Home Guarantee and Regional First Home Buyer Guarantee will be available to any two eligible borrowers, such as friends and siblings, expanding it beyond spouses or de facto partners. They will also be available to non-first home buyers if they haven’t owned a property in Australia in the last ten years, supporting those who have fallen out of homeownership, often due to financial crisis or relationship breakdown. Australian Permanent Residents, in addition to Australian citizens, will be eligible for the Home Guarantee Scheme. 

The Family Home Guarantee will be available to eligible borrowers who are single legal guardians of children, such as an aunt, uncle or grandparent, and single natural and adoptive parents.

Funding for homelessness services

The government is providing $67.5 million to states and territories through the National Housing and Homelessness Agreement in 2023–24 to help tackle homelessness. This funding will assist homelessness services as the government develops a new National Housing and Homelessness Plan.

Angus Raine, Executive Chairman Raine & Horne welcomed the budget measures but still questions the detail around the Help to Buy program. Under the plan, a homebuyer would need to have a deposit of 2% and qualify for a standard home loan with a participating lender to finance the remainder of the purchase.  

He said, “We have seen the government double Foreign Investment Review Board application fees with the express purpose of funding Help to Buy. Yet desperate home buyers still have no indication of when the Help to Buy scheme will commence.”

Energy savings to hit the spot 

Angus also welcomed the announcement of the energy-saving package for eligible households and small businesses. The highlight of the package is that more than 5 million households will have up to $500 deducted from their power bills in the next financial year[ii].

The energy package also includes $1 billion investment to the Clean Energy Finance Corporation (CEFC) to help provide low-cost loans for energy-saving upgrades such as double-glazing, solar panels, and other improvements that will make homes easier and cheaper to heat and cool throughout the year[iii]. This assistance will help 110,000 households lower their energy bills. 

“The energy package will provide some relief for homeowners struggling with the triple whammy of higher energy bills, cost of living and mortgage hikes,” Angus said.