With demand from first home buyers (FHBs) beginning to wane, Treasurer Josh Frydenberg flagged over the weekend that Tuesday’s federal budget will contain a range of new subsidies to improve ‘housing affordability’ under a so-called “family home guarantee package”.
Under the changes reported in the Weekend Australian:
- A government-guaranteed home loan scheme will be offered to more than 125,000 single parents, which will allow them to purchase a home with as little as 2%. “In Sydney, this would see single parents requiring a deposit of just $14,000 based on a property worth $700,000, down to just $5000 for a home in regional South Australia worth $250,000”.
- Access to the first-home super saver scheme will be expanded from $30,000 to $50,000.
- An extra 20,000 places will be offered under the existing first home loan deposit scheme, which allows people to acquire a mortgage with only a 5% deposit, with risk underwritten by taxpayers.
A senior government source told The Australian that the single parent subsidy schemes are “likely to be open-ended, with more places being offered over time depending on demand”.
Clearly, home buyer subsidies are now a permanent feature of the Coalition’s fake housing affordability policy.
Like all demand-side measures, these policies will add more fuel to the housing bonfire, pushing up dwelling values even further, and worsen actual affordability.
Anything to keep the ponzi scheme going.