• Tristan Angelini

How this year’s announced federal budget will affect the rental market




Affordable housing has always been lacking in so many affluent countries, including Australia. The fact remains that acquiring property is very expensive. Paying monthly rent is already a burden to some, let alone, purchasing your own home. In Australia, it has been such a challenge for many potential house buyers to find one that would fit their budget.


Ever since the COVID outbreak, economies all around the world have been facing downturns. Strict lockdowns had to be implemented to slow down the spread of the virus – and because of this, businesses had to shut down temporarily. Others, unfortunately, had to shut down permanently. As for the real estate industry, which has always been regarded as high leverage and high turnover, was suddenly facing operational difficulties plus risks.


The 2020-2021 budget was just released, and this year’s big-spending focuses largely on the nation’s economic recovery. So much of it is allotted to getting Australians back to work. Industries and sectors have resumed operations, and to further assist the economic recovery, some policies will be needed to roll out but many have been wondering what it means for lower-income earners.


According to the recent budget announcement, the budget allocations for affordable housing are increasing. The federal government provided an additional $1 billion through the National Housing Finance and Investment Corporation. This will support the construction of more affordable houses for Australians who are having a hard time finding one that will suit their budget. Because of the problem the nation is facing in terms of affordable housing, several new forms of residential investing has come about.


Scheduled to be completed in September next year is the fund’s build-to-rent affordable housing project in Australia by Aware Super Meridian. An allocated 102 units to be rented at 80 percent of its market rate. Similar projects in Melbourne has just commenced civil works.

While it is evident that industries have been incredibly impacted by the recession caused by the pandemic, it’s still surprising that we continue to see rental enquiries, albeit 30% down from last year. Unemployment among young people has affected the rental market over the past couple of months and this is where affordable housing should be able to provide support. Investment activities slowed down as well due to the factors aforementioned.


The federal budget also includes allocations for job hunters, more investments in liveability such as infrastructure spending, job security for renters, and tax cuts. These key takeaways would give some boost to investor activity, but for areas close to universities, recovery might take a bit longer.


Unfortunately, we can expect that investor activity would remain low compared to previous years because of the low rental enquiry, but with the federal government’s initiative to stimulate more jobs in line with the budget announcement, it will hopefully get it back up. What we are trying to avoid is another wave of rental property shortage, which became such an enormous problem that led to several homeless Australians.


Xotel is an investment created for those who are looking for affordable rental properties. We are committed to giving everyone a chance to find a home that is affordable and suitable.

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Xotel Pty. Ltd.

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Melbourne 3004

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