With good reason. As we know, Housing Minister Michael Sukkar has morphed from policymaker to spiv in the blink of an eye, via The Australian:
Housing Minister Michael Sukkar has urged first-home buyers to try to snap up a property now, ahead of the government’s signature loan deposit scheme starting next year, warning that housing prices are likely to increase.
Mr Sukkar’s bold comments come as the government puts the finishing touches on the First Home Loan Deposit Scheme, which Scott Morrison announced as a major pre-election promise. From January 1, it will enable some first-time buyers to purchase a house with as little as a 5 per cent deposit.
“If you’ve got an opportunity to get a foot in the market before then you should take it, given I think the market is starting to improve,” Mr Sukkar told The Australian. “People who buy now I don’t think will regret it at all.
“A re-elected Morrison government has put a lot more confidence into the market. We’re seeing green shoots in Melbourne and Sydney in the last quarter and I think with low interest rates, with APRA reducing serviceability buffers, all those factors combine to confirm that optimism.”
And he is not finished. A resumption of mortgage fraud is his next policy initiative, formerly from the AFR:
Assistant Treasurer Michael Sukkar will press financial regulators to review their restrictions on bank lending to help ease a credit squeeze and to “get credit flowing” to home borrowers.
Banks and the property industry are worried stricter enforcement of responsible lending laws by the Australian Securities and Investments Commission and an unnecessarily high 7 per cent interest rate buffer being reviewed by the Australian Prudential Regulation Authority are choking off credit to potential borrowers.
Mr Sukkar, who is also Housing Minister, told The Australian Financial Review in an interview in his Canberra office that he would “bring together” ASIC, APRA and the banks to help streamline mortgage approvals after bankers became too conservative in assessing loan applications in reaction to the royal commission.
Today via News he gets his comeuppance:
CoreLogic research analyst Cameron Kusher said he disagreed with the minister’s sentiment and questioned the appropriateness of the guidance.
“It’s certainly unusual given that it isn’t a comment about housing policy and seems to be treading closer to investment advice,” he told news.com.au.
“Remember that the national figures are largely driven by Sydney and Melbourne and the signs of housing market improvement are very recent.
“Furthermore, outside of Sydney and Melbourne values are still declining so first home buyers that were to purchase would be seeing the value of their home reducing.”
…Chief economist at IFM Investors Alex Joiner tweeted: “The spruikers are out in force in this article, neither government officials nor real estate economist (or any other type) commentary should be mistaken for financial advice for individuals.”
Mr Kusher also cast doubt the first home buyers scheme will have any material effect on house prices.
“People accessing the First Home Loan Deposit Scheme still have to qualify for a mortgage with a lender, it’s just they can do so without having to pay lenders mortgage insurance,” he said.
“I am sure the policy will be appealing but I don’t think it will necessarily drive prices higher.
“Ultimately this scheme doesn’t really address the crux of the issue which is housing affordability is a big challenge especially for lower income households.”
Correct. FHBs do not drive prices higher. That privilege belongs to the much higher leveraged investors. But they do tend to trail FHBs into the market.
Even so, the base case remains a muted recovery unless or until the corrupt Housing Minister can unleash another round of mortgage fraud. The credit will just not be there: