The Real Estate Institute of Australia and the Real Estate Institute of Western Australia have welcomed the 2017 Budget's focus on housing supply and affordability issues.

“The boost to infrastructure spending, measures to improve housing supply, the extension of small business concessions, and the retention of the current negative gearing as well as CGT arrangements for taxation of property investments will help ensure that the property sector remains an important contributor to economic growth,” says REIA president Malcolm Gunning.

Gunning said that even though investment in housing has peaked and growth is forecast to decrease in 2017/18, the property sector is still a major driver of economic growth.

Gunning welcomed confirmation the government will not remove or limit negative gearing, or change the capital gains tax.

"This recognises that the current arrangements increase the supply of housing for our growing population, keep rents affordable, and ease the burden on social housing," said Gunning.

“Allowing first homebuyers to build deposits with superannuation through voluntary contributions is welcome," said Gunning.

But Gunning said the REIA advocated for the more aggressive approach of allowing first homebuyers access to existing superannuation balances.

“The change in the threshold for foreign resident capital gains tax withholding to $750,000 from the current $2 million is not welcome," said Gunning, explaining that most foreign investors buy more expensive properties in Sydney and Melbourne.

“It is more red tape and not necessary," said Gunning. 

“The budget is welcome news for home owners, prospective buyers and renters,” Gunning concluded.

REIWA President Hayden Groves said overall the institute is pleased with the 2017 Budget. The Budget has recognised the need to improve housing affordability and address supply constraints, provided small businesses with tax breaks, boosted infrastructure spending, and retained negative gearing and capital gains tax arrangements for property investors.

“This is a fair and sensible budget that is set to encourage growth in the economy," said Groves.

"We’re pleased the government is driving policy to improve housing outcomes, by helping first home buyers salary sacrifice a proportion of their pre-tax income,” he said.

Groves also backed the government's assistance for downsizing seniors.

"REIWA will continue to advocate for reform to transfer duty, specifically a $10,000 concession for seniors to ‘right size’,” said Groves.

The REIWA also applauded wins for small businesses in the budget.

“Most of our members are small business owners and these initiatives by the federal government will be a welcome relief to them, given the challenging market conditions the industry is currently facing,” Groves said.

Groves said the REIWA was disappointed the government is hitting foreign investors with a 'ghost house' levy.

 The Budget's move to prevent developers from selling more than 50 per cent of new developments to foreign investors was also disappointing for the REIWA.

“Foreign investment in WA represents a very small proportion of our local market. These policies will only further dampen an already subdued housing market and deter foreigners who are not permanent residents to locate and live in Western Australia,” Groves said.

Read the treasurer's 2017 Budget speech here.

Read more about the 2017 Budget:

Housing measures in the 2017 Budget

Budget may encourage downsizing with superannuation breaks

Affordable housing in, negative gearing stays, says Treasurer