What does the 2022 Federal Budget mean for our property markets?

What does the 2022 Federal Budget mean for our property markets?

Mar 30, 2022 | by DiJones

Treasurer Josh Frydenberg has unveiled a 2022-23 budget that aims to alleviate some of the pressures faced by households as the cost of living continues to rise in the context of international conflict and the lingering effects of the pandemic. 

By promising expanded guarantee schemes for home buyers, an increased tax offset for low- and middle-income earners for the current financial year, several one-off payments to the vulnerable, a 50% cut in fuel excise, incentives to support businesses, and billions of dollars in funding for major infrastructure projects, the government hopes to ensure continued economic growth and stability. 

Here is a look at the 2022 budget, how the proposed policies could affect property markets across the country, and how other budgetary factors could influence our residential and commercial markets in the coming year?

Housing affordability

With record low interest rates, limited supply of properties on the market, and strong economic conditions, we have seen home values across our capital cities and regions grow considerably over the last 12 months. As a result, housing affordability and accessibility have continued to be major issues for many Australians.

With rising pressure on governments to act, this year’s budget includes several measures that will directly assist first home buyers, single parents, and people looking to move to or buy in regional or rural Australia. We look here at those measures and their potential impact on the property market.

Housing policies

1. Expansion of the Home Guarantee Scheme (HGS)  

The treasurer has outlined plans to expand this scheme, which, since 2020, has been helping eligible buyers purchase a home by guaranteeing a portion of their loan. This allows them to buy or build a home with a smaller-than-usual deposit and effectively removes the need for lender mortgage insurance. Here is a look at the different guarantees offered under the HGS, which directly impacts the real estate market.

The Regional Home Guarantee

This is a new budget measure and is focused on supporting eligible home buyers to buy or construct a new home in a regional location.

With as little as a 5% deposit, buyers can purchase a new home, and the government will guarantee up to 15% of the purchase price. If approved, this new scheme will help up to 10,000 eligible buyers per year until June 2025.

“Availability of new housing stock in regional and rural areas of Australia is often limited. This package will be welcome news to many. It will assist in growing the supply of newly built homes in regional areas. Given that prices in many regional areas have outpaced capital cities over the last couple of years, the flow-on effect of this policy should also assist affordability,” says Dean Mackie, the CEO of DiJones.

The Family Home Guarantee

Meanwhile, the Family Home Guarantee, which helps eligible single parents with dependent children buy or build a home with a minimum deposit of 2% and guarantees up to 18% of the property value, will also be expanded, doubling from 5,000 to 10,000 places each year until 2025. 

To find out more about the Family Home Guarantee, click here

The First Home Guarantee

Finally, the First Home Guarantee (formerly the First Home Loan Deposit Scheme) will continue to help eligible first home buyers enter the property market with as little as a 5% deposit, with the new budget increasing the number of places available on the scheme to 35,000 per year. 

Mr Mackie notes that “any measures designed to accelerate a first homeowner’s ability to get a foothold in the property market are positive. By helping to reduce the minimum deposit requirement, the First Home Guarantee, in combination with the stamp duty exemption scheme delivered by the NSW State Government, will most likely be a significant drawcard for first home buyers.”

2. Increased government guaranteed liability cap for the National Housing and Finance Investment Corporation (NHFIC)

The treasurer announced that the government planned to increase their guaranteed liability cap by $2 billion  so that the NHFIC could, through its Affordable Housing Bond Aggregator (AHBA), help provide low cost, long-term loans to registered community housing providers. This measure is aimed at assisting in the creation and supply of more social and affordable housing to help support vulnerable Australians. 

Other budgetary factors

Investment in infrastructure

The 2022-23 budget includes billions of dollars destined for large-scale infrastructure projects throughout the country. 

From high-speed rail, improved roads, and energy security to rural revitalisation and regional development, the proposed budgetary measures have the potential to influence our residential and commercial property markets considerably in coming years.

“Improved infrastructure can open up new suburbs and regional areas, as faster commutes, better telecommunications, and improved amenities attract people wanting to move away from the city hubs without having to forfeit their jobs,” notes Mr Mackie.

This is a trend similar to the lockdown-induced but still lingering move towards remote working, which sparked unprecedented levels of domestic migration away from the cities.

Mr Mackie also points out that “as these rural and regional areas become more accessible and better serviced, the rising demand for housing will boost property prices and increase employment opportunities. This, in turn, will result in economic growth in these areas, bolstering the demand for housing further.” 

For information about the planned infrastructure projects, click here.

Flood support

For the many people affected by the tragic floods in NSW and QLD earlier this year, the $6.241 billion that the budget has promised for 2022 - 25 will be a welcome support. 

The money will go towards funding recovery and implementing post-disaster resilience measures in the flood-affected areas, as well as providing practical support for the victims of the disaster, with funding set aside for mental health support, primary health care, small business, primary producers, and affected residents, among other things. 

This financial assistance will go some way to ameliorating the devastating effects of the floods, and in time, the affected towns and regions will be back on their feet and heading towards full economic and, one hopes, personal recovery.

As these beautiful areas and their resilient residents recover, so too will the demand for housing. 

Temporary measures to address the cost of living pressures 

Several national and international factors have led in recent months to rising commodity prices, pushing up inflation and making it that much harder for households to meet their basic needs. 

The treasurer recognised this in his budget speech and has included some temporary measures to alleviate some of the pressure on consumers. 

Petrol excise reduction

Russia’s invasion of Ukraine last month has sparked a worldwide spike in oil prices that many of us have noticed not only as we fill our tanks each week but also in the supermarkets, as the rising cost of transporting goods is passed on to end consumers.

The government has halved duties on petrol and diesel to 22.1 cents, and the Australian Competition and Consumer Commission has been tasked with ensuring that this temporary respite is passed on to consumers.

Cost of living tax offset

Another temporary measure is an increased low- and middle-income tax offset (LMITO) for the current financial year (2021-22). This proposal will benefit many who are feeling the pressure of rising living costs by increasing the maximum LMITO to $1,500 for individuals and $3,000 for couples. 

Summing up 

Any initiatives to help our home buyers onto the property ladder and reduce cost of living pressures are very welcome, and the policies contained in the 2022-23 budget are likely to influence our housing markets in the coming months as consumer confidence and economic stability are bolstered by government investment. 

As it stands, many first home buyers, single parents, and people hoping to relocate to rural and regional Australian will benefit from the expansion and implementation of the government’s guarantee schemes, while more vulnerable Australians may benefit from the increased support to the NHFIC.
At the same time, the proposed investments in infrastructure are likely to have an indirect influence on residential and commercial property markets, which will strengthen in certain areas as transport and amenities improve to meet demand. 

Finally, while the temporary cost of living measures will offer relief to households in the short term, looming increases in tax liabilities and interest rates mean that they may not have a significant long-term effect on our property markets.


Frydenberg J, and Birmingham S, “Budget Paper No. 2: Budget Measures 2022-23,” The Treasury, 29 March 2022, p.16.