Federal Budget 2024: $6.2b housing splash

With near record low vacancy rates nationally and an increasingly ambitious housing target of 1.2 million new homes, the $6.2bn package aims to unlock more affordable housing, ease up infrastructure bottlenecks and boost student housing all without fuelling inflation.

Delivering the budget, Treasurer Jim Chalmers doubled down on the government's housing target.

“In the five years from this July, we aim to build 1.2 million of them. Our goal is ambitious but achievable, if we all work together and if we all do our bit,” Dr Chalmers said in his budget speech.  

“[The] $6.2 billion in new investments mean our $32 billion Home for Australia plan will clear local infrastructure bottlenecks, provide more housing for students, fund more social and affordable housing, and we will also deliver better transport for better access to suburbs, cities and regions.”

Treasurer Jim Chalmers delivers his budget speech at Parliament House, delivering a new $6.2bn housing package. Picture: Getty

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The new investment includes $1.9 billion in government-backed loans for social and affordable housing, as well as an extra $1 billion to help the states and territories deliver new housing infrastructure.

The government will invest $1.9 billion into a 10% boost for Commonwealth Rent Assistance to help renters, as well as almost $843 million to improve remote housing in the Northern Territory.

It will allocate an additional $423 million towards the national agreement on social housing and homelessness, in addition to nearly $89 million for construction workforce training.

The new $6.2bn package adds to the more than $11.3 billion in housing measures already announced last week, although some of those initiatives were repurposed funding and joint funding agreements with the states and territories.

The government is spending an additional $1 billion on infrastructure including roads, water and community facilities to support new housing supply. Picture: Getty

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PropTrack senior economist Paul Ryan said the government’s policy changes focused on unlocking housing supply to reduce housing costs.

“The government faces a difficult challenge in making housing more affordable,” Mr Ryan said.

“This is a key issue given Australians are facing record-low housing and rental affordability.”

Here's what's included for housing in the 2024-25 federal budget:

Rent assistance

Nearly one million households will benefit from a 10% boost to Commonwealth Rent Assistance (CRA).

The government increased the maximum rate of CRA by 10% at a cost of $1.9 billion over five years.

Commonwealth Rent Assistance will be lifted at a cost of $1.9 billion over five years. Picture: Getty

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It builds on the 15% CRA boost in last year’s budget. The CRA maximum rate has increased by more than 40% since May 2022 as a result of indexation and the government’s boosts.

“Rising rents are another big part of the inflation challenge, and we’re supporting renters who need our help,” Dr Chalmers said.

“It’s the first back-to-back increase to Commonwealth Rent Assistance in more than 30 years and more much-needed help for young people and renters of all age doing it tough.”  

Housing infrastructure

To boost the supply of new housing, the government has focused on housing infrastructure and social and affordable housing measures.  

Treasurer Jim Chalmers and Finance Minister Katy Gallagher have pledged a further $1 billion to deliver new housing infrastructure. Picture: Getty

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The government will provide the states and territories with a further $1 billion to deliver new housing infrastructure including roads and connecting essential services.

It follows the $500 million that the government previously committed through the Housing Support Program.

Social and affordable housing

The government will provide additional concessional loans worth up to $1.9 billion for community housing providers and other charities to support the delivery of new homes.

The additional financing will support the delivery of the 40,000 social and affordable housing under the Housing Australia Future Fund (HAFF) and Housing Accord.

Additional concessional loans will be provided for community housing providers and other charities to support the delivery of new homes. Picture: Getty

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The government will invest an additional $423 million into a new five-year, $9.3 billion National Agreement on Social Housing and Homelessness.

Under the agreement, the federal government will double its funding for homelessness services – funding that the states and territories will have to match.

Mr Ryan said the national agreement was a continuation of an existing policy, however the federal government had tipped in additional funding, with the expectation that the states would match it.

“Given the housing crisis has been particularly acute for lower-income earners, and the blow-out in wait times for social and affordable housing, this will hopefully provide some easing to a sector facing a challenging environment,” Mr Ryan said.

The government will also repurpose $1 billion under the National Housing Infrastructure Facility (NHIF) to put towards crisis and transitional accommodation for women and children experiencing domestic violence.

The government is allocating about $1 billion for crisis accommodation for women and children fleeing domestic violence. Picture: Getty

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Last week, the government described the crisis and transitional accommodation funding as new spending, however treasury officials confirmed that the funding was redirected from existing NHIF funds.

“Tonight’s budget delivers an additional $1.9 billion in loans to help build 40,000 social and affordable homes,” Dr Chalmers said.

“We have also secured the national housing agreement, which would have otherwise run out.

“We’re building more remote housing in the NT; doubling funding dedicated to address homelessness; and we’re directing $1 billion towards accommodation for women and children fleeing domestic violence, and youth.”

Construction workforce training

To speed up home building, the government will invest $88.8 million to deliver 20,000 additional fee-free TAFE places for construction-related courses.

The budget aims to increase the number of skilled workers in the home building sector. Picture: Getty

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It will also provide $1.8 million to streamline skills assessments for about 1,900 migrants from comparable countries who wish to work in Australia’s housing construction industry.

Mr Ryan said these investments were a welcome response to securing enough skilled trades, which has been a key constraint on construction since the pandemic.

Student housing

The government will develop regulations that require universities to increase their supply of student housing. 

Dr Chalmers said international education enrolments had grown without being matched by an increase in student housing supply.

“This puts pressure on prices and rents, especially in our cities and suburbs,” he said.

International university student places are being capped unless universities create additional student accommodation. Picture: Getty

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“If universities want to take more international students, they must build more student accommodation.

“We will limit how many international students can be enrolled by each university based on a formula, including how much housing they build.”

The government didn’t specify the international student cap numbers.

Infrastructure

The budget provides $16.5 billion for new and existing infrastructure projects across Australia over the next 10 years.

Dr Chalmers said building new homes meant building new connections to communities as well.

“We are investing in vital projects to build new transport networks across every state and territory,” he said.

The budget includes $16.5bn for new and existing infrastructure projects over the next 10 years. Picture: Getty

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The infrastructure package offered $4.6 billion for 69 new projects, including $1.9 billion for western Sydney road and rail projects; $300 million for new Metronet in WA; and $177 million for bridge and intersection upgrades along the Warrego Highway in Queensland.

The government also invested $10.1 billion into existing projects, including $3.25 billion for the East West Link in Melbourne; $1.4 billion for existing Metronet projects in WA; and $1.15 billion for the Sunshine Coast rail link.