Australia’s Treasurer Joe Hockey will introduce home prices as part of his economic stimulus package, as the country’s economy shrinks amid the global financial crisis.
Home prices have surged by over 20 per cent in Australia’s cities since the financial crisis, according to data from CoreLogic.
“We are going to do the hard work of fixing this crisis,” Hockey told a press conference in Sydney.
“The Australian people deserve a more balanced and responsible approach, and that’s why we’re making some tough decisions on the mortgage front,” he said.
The Treasurer will also increase government spending to help pay for the measures announced on Monday.
House prices have jumped by over $100 billion in the past three years in Australia.
The Government has already announced a range of measures, including $50 billion in extra funding for the state and territory governments to help fund the cost of a range or programs, including childcare and education, which have increased prices.
“Today’s announcement is a major step towards addressing Australia’s housing affordability crisis,” Treasurer Joe Costello said in a statement.
The Federal Budget also included a plan to increase tax concessions for home buyers to help them afford the cost.
“For decades, home buyers have been left out of the national housing market because they haven’t been given the right incentives to buy a home,” Treasurer Josh Frydenberg said in the statement.
“This Budget will deliver these extra concessions for all Australians to help those struggling to buy their first home.”
The Prime Minister also promised to increase the supply of low-cost housing by introducing new restrictions on new home construction.
“These measures will give Australia’s home builders a stronger hand to help meet the demand for new homes,” Treasurer Scott Morrison said in his statement.
“We will do everything in our power to help Australia’s new home builders succeed.”
Hockey will announce additional measures to help the mortgage market during the Budget, including the introduction of a “buyer’s allowance” to help Australians buy their own homes.
The announcement comes after the Reserve Bank cut interest rates from the current 4.25 per cent to 3.75 per cent and cut the mortgage rate to 3 per cent from 4 per cent.