Economists have warned that the Morrison Government’s HomeBuilder subsidies for new dwelling and renovations could drive property values down:
HSBC chief economist Paul Bloxham said with lower immigration, there was “going to be less growth in households to drive demand for housing”…
“I would have thought the combination of these things actually puts more downward pressure on housing prices,” Mr Bloxham said.
“We’ve already had a housing boom in Australia, a very large one that delivered a lot of new supply. So, boosting supply even more when demand is weakening, I think presents a challenge for house prices in the established market.
“We need housing construction to continue to fall to match the demand side”…
AMP chief economist Shane Oliver said… the program “may be good news for millennials and those who find the housing market unaffordable”.
In the short-term, HomeBuilder is likely to support house prices by supporting employment. However, once the dwelling are built, HomeBuilder will add to overall housing supply and place downward pressure on both prices and rents.