Morrison out of ideas to save property prices

Good news here, via the AFR:

The federal government is planning a series of housing initiatives for the October 6 federal budget, but has rejected growing calls to fund large-scale social housing projects, saying that was more of a state responsibility.

Housing Minister Michael Sukkar told a closed conference last week that housing would be a significant element of the federal budget, which would focus on stimulating jobs and economic activity.

…While no budget decisions have been made on housing yet, the government is considering extending the First Home Loan Deposit Scheme it took to the last election, as well as tweaking an existing finance scheme for social and affordable housing to free up monies trapped within.

If burning naive FHBs at the stake is the best that they can do then sell, sell, sell because the fiscal cupboard is bare for house prices, right along with the cobweb-filled monetary drawer.

We remain bearish house prices owing to:

  • high unemployment;
  • immigration collapse;
  • bank tightening;
  • crashing rents;
  • virus convulsions;
  • 1.3m loss-making landlords getting smashed on income and equity, and
  • monetary plus fiscal exhaustion.

It’s investors that drove prices up and it’s investors that will drag prices down.

David Llewellyn-Smith
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Comments

  1. Strange EconomicsMEMBER

    No liberal votes in social housing even though it would be a good initiative on many grounds and direct benefit to construction quickly. They prefer to prop up the specufestor class.
    In fact it reduces demand for private rental by the low incomes so would be considered marginally negative for house prices.

    • Jumping jack flash

      Indeed. It is more traditionally Thatcherist to use mechanisms like the old NRAS where the private sector is paid public money to do what they would have done anyway, but for more profit.

      I mean, the end result is the same, the downtrodden get cheap houses, and someone else gets rich, and the government gets the credit… what’s not to like?

  2. Sometimes its a good lesson to burn a few FHB’s as an example to the rest. A saving generation is what will be created. Long grind down while the scaring heals.

    • Jumping jack flash

      Agree,
      and to think they thought they could remove the cyclical nature of the economy!

    • There are no FHBs except those taking money from the Bank of Mum and Dad, who effectively get a family investment house. So the Parent FHB scheme helps those boomers, as they don’t have to contribute as much deposit to their gig economy kids.

      Still with no cruises, OS trips or caravan trips interstate what else is a retiree to do with the cash? – Buy a bigger beach house?

  3. Goldstandard1MEMBER

    Hang on, Hang on…… I keep hearing “The government will not let housing fall”.
    Even with a once in a century health issue, record unemployment, no immigration and everything else DLS keeps banging on about, that is the Bulls’ belief.
    It’s a bit like when a king is facing an army 50 times larger and more talented, and he tells his scared troops not to worry because god is on their side, but they get slaughtered with surprised looks on their faces.

  4. I disagree. I read ‘extending the First Home Loan Deposit Scheme’ = super for housing has arrived.

  5. Playing out around the country right now. All those boomers who took on 30 year mortgages late in life…

    “February and have made great progress. Paid off a credit card and a loan to family member.
    left with a personal loan of 30K and home loan of 380K.
    I’m 54 and hubby 60.i feel very disheartened at the prospect of the mortgage never being paid ( we still have 18 years) and both having to work close to 80.
    There is no equity in our home so no opportunity to downsize ( kids have all left home).
    If we sold it we’d still have to pay rent, similar to our home loan so may as well stay somewhere we love and can knock hooks in walls !!
    We are on a fixed rate until next year with ANZ. If we try and refinance next year, lenders want an exit strategy, how can we service a home loan of 18 years at our age?
    We don’t have one… and it’s thoroughly depressing.
    Feeling all very overwhelmed.
    We made very bad money choices in our earlier years.”

      • billygoatMEMBER

        Probably a millennial social media writer put this anecdote together thinking old folk in their 50’s talk like this. No self respecting person in their 50’s refer to partner as hubby.
        Out of touch & patronising media with BS illustration of how dumb and stupid people are about housing and loans.\
        Dah dah dah were all in this together except we are not

    • I’ve made financial choices all my life with the goal of owning the roof over my head at retirement. All these other fcking idiots at my age have giant mortgages due to nothing but stupidity and are now complaining about their terrible situations. No equity in their house FFS. Bet they have/had flash cars and lots of overseas holidays.

      Demands for bailouts will come next and probably be met, and it’ll be me who was the chump.

    • truthisfashionable

      “if we sold it we’d still have to pay rent, similar to our home loan”

      Of course, couldn’t possibly downsize from a (presumably) family size house now that it is just the two of them and live within their soon to retire means.

    • kannigetMEMBER

      A mate tried to convince me last week that it was not a problem taking on a 30yr mortgage at 50 because while I may have not paid it off by the time I retire I can sell and take advantage of the capital gains…. e.g. borrow $900K, pay of $150K and sell it for $1500K in 10 years…. I would have $750K to spend on the house I want to retire in….

      I tried to point out that its just fairy tail thinking in a depression like pandemic enforced economy with no short to medium term prospects of removing the constraints the pandemic is inflicting.

      His responses was to stop being so negative…..

      • “I tried to point out that its just fairy tail thinking in a depression like pandemic enforced economy with no short to medium term prospects of removing the constraints the pandemic is inflicting.”

        I honestly can’t believe just how positive (blaise?) people’s sentiment is given what’s happening. People are buying houses at peak prices in my area like no tomorrow. Maybe sentiment will change in March next year?

    • Is this real? And the boomers say Gen Z is irresponsible and entitled. Fvck let them all starve

  6. DodgydamoMEMBER

    Fat lady hasn’t begun singing until young FHBs are permitted to tap their meagre superbalances for home deposit… perhaps to be announced October 6th?

    • Reus's largeMEMBER

      I think that most of them already withdrew what they had, there was a analysis done here somewhere on MB I think on that, where like 60% of all under 30’s had withdrawn all their super

    • Actually, you have a point there but it raises competing outcomes. Budget stimulus to boost industry activity is either new builds or renos with new builds providing the biggest bang-for-buck stimulus, but this boosts supply thereby eroding house prices while improving affordability. Another factory, I think traditionally it is not the majority of FHB who buy new anyway because of affordability.

    • DelraiserMEMBER

      Was it not Tony Abbott who stated:

      “ We want house to become more affordable, but not through lower pricing at the expense of homeowners”

      Magic perhaps?

      • There is the option of house prices not rising, or lowering – staying stable. Then wait for wages to catch up to make them more affordable.

        But with turbo charged mass immigration, that’s unlikely to happen.

  7. truthisfashionable

    I wonder how many times this government has said “that was more of a state responsibility.”

    If so much is “more of a state responsibility” do we really need federally elected numpties constantly blocking or hindering the states?
    This government seems ‘hell bent’ on highlighting what little value the commonwealth can provide.

    • Arthur Schopenhauer

      At their core, they hate the institution they run. It’s just a vassal for their display of power.

  8. “extending the First Home Loan Deposit Scheme it took to the last election”… extending it to ALL home buyers?

    • kannigetMEMBER

      They will call it the “First Home Bought During this Pandemic Buyers Scheme” – You will Qualify for it if you have not bought a home this pandemic you get a grant. This will leave room for you to buy another one next pandemic….

  9. I reckon they will take the obvious popularity of the Super withdrawals to the next level and allow one off withdrawals from Super of, say, up to $50k if you use it to buy a home (or maybe get ahead in the mortgage to avoid having to sell). They will justify it on the basis of the research that says owning your own home makes you better off in retirement.

    Maybe they could further “sell” it by saying that if you’ve taken that money out, your pension assets when you retire in due course will be $50k (indexed) higher
    Plus it would hurt Industry Funds way more than retail funds.

    • Brett JamesMEMBER

      I hope so Jason, maybe increase the allowable to $100k even! That would be the first thing gov did in this pandemic that would have any positive for me.

      • China PlateMEMBER

        Why not MMT all super accounts up to and over 7 figures. Let people withdraw up to well, i don’t know, a tidy 7 figure sum to purchase well let me see

    • Yet that will undoubtedly have a negative effect on the ASX (Banks especially), perhaps also the more illiquid assets with forced sales by the super industry.
      Need to keep the boomers happy with franking credits/share portfolios too you see….

      • Would be good for banks. Less good for Industry Super (retail super tends to be more liquid).

        Industry Super would explode at the thought of it.