Rather than easing back on government stimulus that is helping fuel an already hot property market, the Morrison government ramped up its economic support for the sector in the May federal budget.
The government not only extended its wildly popular HomeBuilder Scheme, but also introduced the Family Home Guarantee, which it claims will create a pathway to home ownership for single parents to enter or re-enter the housing market.
From 1 July 2021, the government will provide 10,000 guarantees over four years for eligible single parents with dependants to build a new home or purchase an existing home with a deposit of as little as 2 per cent, regardless of whether that single parent is a first home buyer or previous owner-occupier.
The Family Home Guarantee is based on the already established First Home Loan Deposit Scheme and New Home Guarantee, which are helping more than 26,000 first home buyers enter the housing market sooner.
As an example of how the scheme will work the government has put forward the case study of Emma, a single parent with two young sons, Brad and Patrick. Emma has found the perfect home for $460,000 but has struggled to save enough for the $92,000 deposit while paying rent.
With the Family Home Guarantee, and on the success of her application with a lender, Emma can now move into her dream home sooner with a $9,200 deposit.
More first home buyers will also be helped by an additional 10,000 New Home Guarantee places which will be released on 1 July 2021 for first home buyers seeking to build a new home or purchase a newly built home.
The budget also included an extension of HomeBuilder with an additional 120,000 grant applications for eligible home owners, including first home buyers, to build a new home or substantially rebuild an existing home.
The government has also acted to expand the First Home Super Saver Scheme (FHSSS) to ensure more young Australians can achieve the dream of home ownership.
According to the government, the number of first home buyers is near its highest level since 2009, and accounts for nearly 40 percent of new owner-occupier loans, well above the 10 year average of around 30 percent.
The maximum amount of voluntary contributions that can be released from the FHSSS will increase from $30,000 to $50,000, effective from 1 July 2022. This increase will fast-track home ownership for first home buyers.
Director of KR Peters Peter Nicolls says the budget measures will continue to support the property sector.
Mr Nicolls says property prices have risen 25-30 percent in recent months because of pent up demand due to Covid lockdowns and record low interest rates.
He said state governments would benefit from the budget measures thanks to more stamp duty revenue. The measures would also help support consumer confidence.
"People are feeling asset rich because of booming property prices," Mr Nicolls said.
"Time on the market has reduced and I don't see any signs of that slowing down."
However, he warned there were also negative consequences of a booming property market fuelled by government stimulus.
"There has definitely been an increase in anxiety and rent stress. Buyers are having to move further out or interstate and first home buyers will find it increasingly hard to enter the property market.
"And at the end of all this, the government will end up with a huge debt for which we will all pay."