Housing affordability was promoted as a centrepiece of the budget on Tuesday night with measures allowing first-home buyers to use up to $30,000 of voluntary superannuation contributions to place a deposit on a home.
There will also be fines for foreign investors leaving properties unoccupied and measures encouraging older people to downsize and free up more properties by letting them make a non-concessional contribution of up to $300,000 from the sale of their principal residence into their superannuation.
However, the government has left negative gearing and capital gains tax concessions in place.
AMP Capital chief economist Shane Oliver did not expect it to have much impact.
“The Budget’s housing affordability measures may have an impact on home prices over time if they incentivize states to ramp up supply, but it’s likely to be marginal in the short term,” Dr Oliver said in a note to clients.
Ratings agency Moody’s said the changes will have minimal effect on affordability.
“While housing affordability measures announced in the budget are unlikely to have an immediate impact on the latent risks in the housing market,” Moody’s said.
“Specifically, while the measures over time could improve housing affordability through an increase in the housing stock, they are unlikely to address record high house prices and household leverage at a time of weak wage growth.”
Noted economist Saul Eslake said it would put more pressure on housing prices.
“We’ve got 50 years of history to support the proposition that anything that allows people to spend more on housing than they otherwise would — which is what this measure will do if it works — ultimately results in more expensive houses, not in a greater proportion of the population owning houses,” Mr Eslake told Lateline.
Andrew Ticehurst, an interest-rate strategist at Nomura Holdings also expressed doubt about the effectiveness.
“On housing they’re doing about nine different new things, but I still don’t think in net terms it adds up to much in terms of boosting affordability greatly or slowing down foreign demand,” Mr Ticehurst told Bloomberg.
Data from CoreLogic shows that Sydney’s median house price is just under $1 million, up 16 per cent from last year.
Peter Jolly, head of market research at National Australia Bank, said the problem is supply.
The “fundamental issue is we don’t have enough dwellings, we’re not building enough relative to the population,” Mr Jolly told a post-budget breakfast in Sydney.
The sharpest criticism of the measures came on Twitter.
As advertising expert Dee Madigan, who had worked on election campaigns for the Labor Party tweeted: “Shorter Scomo: ‘Hey young folk, now it will only take you 200 yrs to save for a house deposit instead of 240 yrs. You’re welcome!’”