Borrowers will welcome tax cuts proposed by the Coalition, but the structural issues underpinning Australia's declining housing affordability still need to be addressed, the Real Estate Institute of Australia (REIA) said this week.
REIA president Graham Joyce said that a phased approach to tax cuts will minimise the risk of interest rate pressure, an issue important for all home buyers, and particularly buyers with sizeable mortgages.
"More money in home buyers' pockets will assist in reducing mortgage stress for those who entered the market in recent years", said Mr Joyce.
The proposed $20,000 tax threshold will be beneficial for low income earners seeking to get a foothold into the housing market, he added.
"However, the tax cuts will not address the financial balancing act many aspiring young home buyers face in paying off burgeoning HECS debts, while trying to start a family and raising money for the deposit and costs to purchase a home."
In addition to the proposed tax cuts, the REIA would like to see a more structural approach to housing affordability put in place.
"Strategies could include an increase in the first home owner's grant, and the provision of access to voluntary contributions to superannuation, for the purpose of a home deposit,' said Mr Joyce.
The REIA called on the ALP to release its tax policy so that voters can make informed choices about the different options being proposed.
"We look forward to further announcements from both major parties to specifically address the important nation-wide issue of housing affordability", Mr Joyce said.
