Coalition pledges never-ending first home subsidies

Housing Minister Michael Sukkar was interviewed by Sky News yesterday where he signaled that the Morrison Government would indefinitely subsidise first home buyers’ property purchases:

“10,000 places [in the FHB deposit subsidy scheme] have been released today. This scheme allows people to purchase their first home with a deposit of as little as 5%. One of the big barriers we find for FHBs is that banks are requiring a deposit of 20%. In places like Sydney that can take up to 10 years to save. In places like Melbourne up to eight years. So the First Home Deposit Scheme brings that forward by many, many years… It also saves them lenders’ mortgage insurnance…

“My advice would be: If you’ve been thinking about purchasing your first home, if you’ve put together a modest deposit, you might be able to press the button with the assistance of the Morrison Government…

“I expect that this will be a feature of the Morrison Government’s policy prescription going forward for helping people getting their first home”…

So there you have it straight from the horses mouth. FHB subsidies are now a permanent feature of the Coalition’s fake housing affordability policy.

The Coalition has to generate buyers for property investors to hand-off losing assets:

Might as well summon thousands of FHB patsies.

Leith van Onselen

Comments

  1. Reus's largeMEMBER

    You need a job to save up a 5% deposit and to make the repayments, being that most FHB’s are the younger generation that are fast running out of jobs, there is going to be a low take up once the euphoria wears off and the country dives into recession

      • Banks will still require a solid full time job to grant a loan, better not be self employed either. The take up will be people who are paying very high rents so find it hard to save, and people who havnt been saving for long (bringing demand forward).
        Banks arent lending like they were a few years back.
        I suspect many mums and dads will find themselves on the hook as guarantor

      • developers will charge what the market will bear. Subsidies raise the bar so prices would in “:normal” times increase. Today, well probably not much.

    • A job? Why?
      MMT will create all the assistance to borrowers that they need. No need to actually earn income; it will be given to us all to do whatever we want with it! It’s limitless after all. And the beauty of MMT is – it never has to be repaid!
      Working is another anachronistic relic of the past.

      • Jumping jack flash

        This!!

        Since debt is absolutely essential to use to purchase a property, it is a travesty of the highest order that some people cant access the amounts of debt that are necessary.

        Something must be done!

        In steps the government with the solutions to get the debt into the hands of the people where it belongs.

        Oh MMT needs to be repaid, it just isnt. It is rolled over, much like a twin process to how the banks manage their debt. If MMT wasnt repaid it would create hyperinflation and that would be bad.

  2. Actually – you’ve got that wrong. That’s straight from the horse’s ass…

    • I do take comfort that there are some of us resisting the siren song even though we are in a position to buy. I am not getting saddled with a ridiculous amount of debt for a crappy house no matter what spoonfull of sugar to help the poison go down. I will make my decision based on the economics of the situation, what is reasonable compared with income, and what will enable a safe buffer should our circumstances change/interest go up. If that is not possible with prices as they stand, then it is not possible. A prettily drawn map will not change the landscape. If there’s a swamp, there’s a swamp.

  3. Jumping jack flash

    Well this is hardly surprising.

    Next stop, infinite wage subsidies.

    The thing is, there’s not really any other alternative that will allow them to maintain the status quo.

    • I guess I purchased because I was afraid of this madness and had no idea what it would do to those holding significant deposits. If they choose to go the high inflation route that is what scared me.

      • Jumping jack flash

        Inflation isn’t the problem, we are locked into at least a 30-year period of severe debt deflation caused by far too much debt and not enough debt growth.
        The debt is so huge that it is suffocating the economy. 2.4 trillion debt dollars for 26 million Australians. That’s just ridiculous. That’s 100,000 dollars of debt for every man, woman, and child, and everything in between.

        Inflation would be welcome. They’re looking desperately for inflation.
        Inflation would allow debt growth.
        Debt growth would save us.

        Edit: not debt deflation – I’m looking for a Minsky Moment. Debt deflation happens after that.