A comprehensive housing affordability package is unlikely in the forthcoming federal budget, economists say, following the Turnbull government’s stance that tighter regulatory measures are already taking pressure off housing prices.
The government is reportedly considering allowing first home buyers to sacrifice their salary to save a home loan deposit more quickly, similar to current superannuation arrangements, and slugging investors with a tax on vacant properties in next Tuesday's budget.
Other options reportedly under consideration are exemptions to both the $1.6 million lifetime cap on superannuation contributions and the non-concessional amount that can be contributed annually, if the top-up is coming from the sale of a large family home.
Additionally, new incentives to encourage immigrant workers to settle in regional centres rather than the congested capital cities have been discussed.
Tim Lawless, director of research at property analytics firm CoreLogic, says there is only so much the federal government can do to increase housing affordability as local governments control zoning and planning and state governments are responsible for land supply and infrastructure.
However, he believes providing a tax break to seniors who downsize into smaller homes could help add to supply of large homes and reduce overall prices.
"That's probably a very valid and appropriate policy to have. One of the key barriers for older home-owners downsizing is simply the cost component to doing that," Mr Lawless said.
UBS chief economist Scott Haslem said the government may not end doing much about affordability in the budget at all.
He said it has strongly indicated that it sees APRA's recent tightening of mortgage lending standards, rising bank mortgage rates and the additional housing supply due to come onto the market over the next two years being a large part of the solution to rising housing prices.
Treasurer Scott Morrison told reporters recently that the regulatory "scalpel" was already starting to ease price pressure, particularly in the apartment market.
However, Mr Haslem said there was still a chance the government could partially rein in excessive negative gearing by investors and tax vacant properties.
"You can't completely dismiss some policy change like some sort of tightening up at the edges in terms of negative gearing and the like in order to limit the the extent to which house prices rise, but it's not our central case," said.
"We're actually looking at housing prices to flatten out into 2018. It wouldn't surprise me if prices went sideways for a number of years."