The Real Estate Institute of NSW (REINSW) has attacked the Morrison Government’s first home buyer (FHB) deposit subsidy scheme, claiming it will create unintended consequences for the housing market. From RealEstate.com.au:
The industry body’s chief executive Tim McKibbin said the government offer was admirable but the prime minister would have been better off taking a more hands off approach to the housing market.
“Assisting first home buyers is unquestionably a good use of government resources,” he said. “However, when the government uses its power to influence a free market, it invariably has adverse consequences.”
He added that a government offer to remove GST on new properties would have been more effective in helping first home buyers because the tax has been instrumental in driving up purchasing costs for buyers.
The government has also offered no solution to improving housing supply, which has been another significant driver of high prices, Mr McKibbin said…
“Banks are entitled to feel confused, considering it is less than six months since they were heavily criticised for their lending practices”…
“It is concerning that the banks, who are integral to the success of the government’s policy outcomes, were not consulted,” Mr McKibbin said.
This is funny stuff, given the Coalition admitted that Australia’s property lobby was behind the policy:
Mr Morrison rejected suggestions the plan announced on Sunday, and quickly matched by Labor was a taxpayer-funded subsidy and said it won’t lead to an increased risk of purchasers getting into financial trouble.
“It enables them to open the door and actually turn the key on their first house,” Mr Morrison said.
“In a couple of years they will undoubtedly refinance and they will go through that process again. The equity in their home will build and they’re up, up and away. That’s where we want to get them to”…
Asked what modelling had been done, Mr Frydenberg said the government “had spoken to people in the sector.”
I guess you can’t keep all property parasites happy.