Treasurer Jim Chalmers handed down the 2025-26 Australian Federal Budget on Tuesday 25 March 2025. With the upcoming federal election, the budget handed down has been perceived by many as a balancing act of trying to address voters’ cost of living pressures while simultaneously demonstrating fiscal restraint.

Partners Fiona Nelson and Duncan Webber of our national Property & Development team have identified some of the potential impacts the budget might have in the year ahead on the Property Industry.

Key considerations were:

Housing

A number of measures were announced targeted at increasing housing supply and making the housing market more accessible for Australians, including:

• $4.6m over the next four years to continue the role of the National Housing Delivery Coordinator (who will work with State and Territory Governments to drive additional supply in the housing sector)
• $54m to increase the supply and adoption of prefabricated and modular housing construction
• $800m in additional investment in the Government’s existing Help to Buy scheme (by increasing income and price caps) to help support a greater portion of Australians in their acquisition of new and existing homes via the shared equity scheme.

Fiona Nelson noted that “The Government’s announcements targeting housing supply and affordability comes as no surprise given the current environment. However these announcements are just a small part of addressing the problem of housing supply – as our clients constantly tell us, in order to radically increase housing supply more work needs to be done by all levels of Government to cut through the planning red tape and address the rising costs of developer contributions, both of which are also required to combat the current housing crisis.”

“While prefabricated and modular housing construction is not new and comes with its own challenges, Government support for this sector will be critical in building a domestic supply chain of sufficient size and scale to respond to the current housing crisis and bring down construction costs and project timelines. It will be interesting to see how this funding will be directed and whether it is enough to support significant growth in the sector.” - Duncan Webber

New Energy Apprenticeships Program

Targeting the current skills shortage in the residential construction sector, the Government has committed to provide $626.9m over four years to reframe the current New Energy Apprenticeships Program and expand the program to capture ‘critical residential construction occupations’.

While no clear detail has been provided on what will constitute a ‘critical residential construction occupations’ this additional funding will hopefully help residential developers and subcontractors attract young workers to the sector to help address the current shortages.

Cost of Living Relief

The Government has announced a suite of measures in an ongoing effort to address the ongoing cost of living crisis, including:

• Additional person income tax cuts from 1 July 2026
• $648m in Medicare levy relief for low income earners
• Energy bill rebates for over 10 million households ($1.8 billion)
• 20% reduction to all HELP and student loan debts ($19 billion)

It is possible that the above cost of living measures coupled with a potential future drop in the RBA cash rate (as predicted by the big four banks) may lead to increased activity in the residential housing market and increased demand which will hopefully also lead to increased development activity amongst residential developers.

Foreign Investors

Funding has been allocated to both the ATO and Treasury to help both enforcement of bans on foreign purchases of existing residential products ($5.7m) and to implement and enhance audit and compliance measures to target land banking by foreign investors ($8.9m).

These measures are likely to steer foreign investment into the residential sector in a manner which will encourage new construction over foreign investor land banking which will, in turn, increase overall housing supply.

Foreign investment in residential land has always been, and continues to be, subject to high levels of scrutiny by the Foreign Investment Review Board. Clients are reminded to remain mindful of the complex sets of exemptions and thresholds for foreign investors (including upstream investors in Australian landholding entities) and seek advice if necessary. 

Continued Investment into large scale infrastructure projects

Despite the level of investment into new programs designed to bolster the residential construction sector (as well as cost of living relief) – the Government also announced continued large-scale commitments to major infrastructure programs ($17.1 billion) over the next ten years.

“While the investment in good quality infrastructure and roads across Australia is always going to be important – Governments, both Federal and State – need to continue to be mindful of the resulting impacts these large-scale programs have on the labour supply for other sectors within the construction space such as residential development.” – Duncan Webber

Summary

As always, the property industry is dynamic and constantly responding to a range of economic factors (including Government announcements and budget updates). It remains critical for both private and public sector clients to continue to stay informed about budgetary changes which impact the industry and their legal implications (if any) as those announcements are implemented and responded to by the market.

Fiona Nelson the national head of the Moray & Agnew’s Property & Development practice is confident that “Moray & Agnew has the capability across its Property, Construction, Planning and Environment teams to help clients navigate the impacts, and associated regulatory compliance, which may flow from the Treasurer’s announcements”.

Further information / assistance regarding the issues raised in this article is available from the authors, Partners Fiona Nelson and Duncan Webber or your usual contact at Moray & Agnew.