With Australia's housing crisis reaching alarming proportions, the Federal Budget 2025 aims to alleviate this issue with a set of measures directed at the housing sector. Unfortunately, plans that initially appear beneficial for people dealing with affordability and the supply shortage may never come into fruition. Successful execution, profound planning changes, and private sector collaboration will be required.  

Investment Insights: 

Help to Buy’ initiative to be allocated an additional $800 million. 

Increased income eligibility caps to $100,000 for singles and $160,000 for couples. 

Price restrictions on properties have been lifted, granting access to a wider range of options. The scheme is expected to commence later in 2025, subject to current government requisites. 

Increase in Modular and Pre-Fabricated Housing: 

• $54 million pledged to increase the construction of modular homes. 
• $49.3 million to state governments for the advancement of the modular housing industry. 
• Support accelerated home-building efforts to achieve the target of 1.2 million new homes within five years. 

Promise Overload? 

Unfulfilled pledges, such as the construction of 250,000 houses every year, persist. 

Concerns abound about dramatic promises the government makes with no real impact before elections. 

Focus on the primary issues: slow planning approvals, high construction costs, and stagnant productivity. 

Cost of Living and Housing Affordability: 

• The broad structural cost-of-living support also includes tax deductions, energy bill cuts, and lower-priced medicines.

• No immediate aid is available for existing homeowners or renters.

• Temporary aid does not remedy the underlying structural problems within the housing market.

From an economic and investor point of view:

The unaffordable cost of housing, coupled with sharp inflation and rising interest rates, is a much more pressing problem.

Homebuyers are being forced into taking on increasingly greater levels of debt to purchase a home.

The budget puts forth something new by shifting the focus of political priorities but still marks only the beginning. The housing challenge is multi-faceted, needing more than just money. As property investors, it is key to remember the fundamentals: a growing population with constrained supply and a long-term market demand for quality residential housing. Those factors create opportunities for the ready, informed, strategic, and willing to move.

Achieve Your Financial Goals with OM Financials. We will help you navigate the market, determine the right investment opportunities, and secure the right financing. Don't be left behind in wealth creation. Call 0478 876 967 or Schedule a Consultation today so together we can grow your property portfolio.