So what big announcements did they reveal in last week’s Federal Budget?
Not much actually. And that’s a good thing, says the Real Estate Institute of Australia.
“In general, it gave the impression that the economy is in good shape and that gives general confidence to people that are buying and selling,” REINSW President Leanne Pilkington told The Real Estate Conversation.
REIA President Malcolm Gunning agreed that the Budget’s approach recognised the state of the property market and the impact that tighter lending measures have had in cooling the Sydney and Melbourne markets. So the Treasurer has seen no reason to make any further adjustments.
There was one interesting announcement for home owners over the age of 65 years. The Federal Budget has broadened a scheme which will allow older Australians to access equity in their homes to help fund their living expenses.
Initially a scheme for part-pensioners, now every home owner over 65 years can access a “reverse mortgage” worth up to $11,799 per year for the rest of their lives, reports Domain.
What is a reverse mortgage?
It aims to solve a problem many older Australians face. They’re sitting on a gold mine of wealth tied up in their home, but they can still find themselves cash poor with superannuation or pension payments insufficient to meet the full cost of living.
Rather than selling their home, the Pension Loan Scheme allows home owners to take out a loan against their home, which they can use to supplement their cash flow. The loan is paid off when the house is sold, allowing pensioners to age in their homes.
It’s a reversal of the initiatives announced last year which offered tax advantages to encourage retirees to sell empty nest homes and downsize. Go figure!