Fidelity: ScoMo’s first home buyer bribe to make affordability worse

By Leith van Onselen

Fidelity International investment specialist Anthony Doyle has taken direct aim at Scott Morrison’s first home buyer (FHB) deposit subsidy scheme, claiming that it will actually make housing affordability worse by pushing up prices. From The AFR:

Mr Doyle said that introducing subsidies on the buy side doesn’t address housing affordability. He said the result of such schemes is to drive up demand…

That’s good for people who want to sell their current property and upgrade, but it’s not so helpful for those struggling to enter the property market in the first place.

“It’s not going to address housing affordability, but it may have some role in stabilising house prices,” he said…

Albert Edwards from Societe Generale dubbed the UK equivalent a “moronic policy”. Mr Doyle said that he wouldn’t go that far, but he was highly sceptical.

Scott Morrison’s FHB bribe was never about improving housing affordability, but boosting demand and preventing further price falls. He explicitly admitted so last month: “We want to see more first-home buyers in the market, absolutely, and we don’t want to see people’s house prices go down”.

Scott Morrison also admitted that no modelling had been done on the Coalition’s First Home Buyer Deposit Scheme and that Australia’s property lobby was behind the policy.

Remember, Scott Morrison worked at the Property Council as National Manager of Research and Policy from the age of 21 to 26. The property lobby runs through his veins and he will always do its bidding.

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