Industry experts generally have welcomed the Federal Government's latest budget, saying that the tax cuts and increased benefits for families should greatly enhance the potential borrowing capacity of households wanting to enter the housing market.
A double income-earning family with two children, for example, could see their potential home loan borrowing capacity increased by an average of over $40,000, allowing more families to become new home owners, according to Housing Industry Association Managing Director, Dr Ron Silberberg.
Dr Silberberg has calculated that individual low- to middle-income earners stand to gain up to $80 per month in additional disposable income.
Higher income earners will also face lower personal income tax rates, providing a substantial incentive for additional household savings.
"These tax cuts mean that families may be able to reduce their mortgage by up to five years, if additional disposal income is directed at meeting home loan repayments," said Dr Silberberg.
The Mortgage Industry Association of Australia was a little more conservative, suggesting that many families buying their own home could cut more than $30,000 off mortgage repayments over the life of their loan if they channelled this week's Budget gains into their mortgage.
MIAA chief executive, Phil Naylor said this week that, in some cases, this home budgeting strategy could mean that the loan is paid off three years earlier.
Dr Silberberg noted, however, that over $32 a month is immediately carved back in additional mortgage repayment requirements resulting from last week's interest rate rise.
This sentiment was echoed by the Real Estate Institute of Australia, which warned that the value of personal tax relief could be undermined by this month's interest rate rise and the spiralling cost of petrol prices, while any positive impact on household budgets and consumer spending power from the announced tax cuts may have an inflationary impact on the economy.
Nevertheless, said REIA President Tony Brasier, "the overall thrust of the budget is positive for Australian homebuyers, investors and business."
