How LNP's Bugdet Would Impact Australia's Housing Market

The 2019 Federal Budget proudly delivered news of a surplus of more than $7 billion.
 
Whilst ambitious in nature, with some undertones of stability and sustainability, the property market could get the boost it’s been waiting for.

This could mean that first-home buyers, who previously have enjoyed the affordability of the market over the past few months, may feel the burn.
 
The Budget surplus promises will be a boost to general sentiment in the property sector as the confidence feeds off policies and promises.
 
There are no wild cards here for the property market, but instead an undertone of stability and sustainability through job creation and a $100 billion infrastructure spend, both of which will underpin the property market throughout the country.
 
LNP Treasurer Josh Frydenberg has highlighted some winners, but there have been some losers along the way also.
 
The winners here are the regional markets with a focus on regional infrastructure spend, upgrades to regional hospitals and a robust drought package.
 
This is very likely to attract the more speculative property investors to buy up in regional areas that are earmarked for infrastructure spend, well in advance of anything breaking soil. Which will offer a more immediate boost to those regional property markets.
 
The real losers here are the first home buyers with nothing in particular for them in the terms of financial stimulus.
 
The government have somewhat tried to address this indirectly by focusing on a proposal of the fast trains linking major CBD’s to more affordable satellite cities.
 
One would imagine this will be attractive for first home buyers to get into more affordable housing where they can still access employment. However, this proposal is to put in a fast train from Wollongong to Sydney, Geelong to Melbourne. As the result of this, Brisbane to Sunshine Coast and a few other regional hubs could in fact have the opposite effect and boost prices in these areas thus further pricing out first home buyers.
 
It will be a boost to those economies and in turn the real estate market, but we certainly won’t see an immediate impact of this.
 
The real surprise package here is the $2 Billion package for small/medium business (classified as businesses up to $50 Mil turn over) to have better access to funding and finance options.
 
Currently many SMSE in Australia use the equity in their own home to fund their business growth and activities, effectively using their home loan as a business line of credit. This makes it prohibitive for business owners to upgrade the family home or buy investment properties when their equity is tied up in the business, as opposed to being used for property decisions.
 
The experience of The Real Estate Conversation is that SMSE owners would prefer to use their equity to upgrade their home, renovate or invest but they just don’t have any other good lending options to support their business activities. If this funding package solves that problem then this will allow more business owners to play in the property space, and given business owners make up a large percentage of the economy this will have a flow through effect to boost prices if they can make this easier and less prohibitive.
 
“Having said that, the devil will be in the detail as there was not much depth as to how this policy will work in real time given during the budget delivery.