Coalition summons more first home buyers with subsidies

Federal Housing Minister Michael Sukkar says the federal government is considering an expansion of its low-deposit scheme for first home buyers at a time when aspiring buyers face being priced out of the surging property market.

Launched in January 2020, it allowed 10,000 first-home buyers to acquire a ‘modest’ home with only a 5% deposit. The announcement comes amid a recent report on housing affordability by CoreLogic and ANZ, which found it now takes an average household 10.8 years to save a 20% deposit for a median house in Australia, which is a new record:

From The Australian:

Federal Housing Minister Michael Sukkar has conceded some aspiring entrants into the property market are in danger of being priced out of the market, with soaring house and unit values requiring ever increasing minimum deposits and bank mortgages…

“If the problem is still the deposit hurdle, then we’re very focused on helping first-time buyers get over that hurdle, and that will inform our thinking into anything further we do,” Mr Sukkar said…

The number of market entrants has dropped by almost a third since the start of the pandemic housing market boom in October last year, which caused prices to climb by more than 22 per cent since…

The MP in charge of the federal government’s affordability inquiry, Jason Falinski, said both state and federal governments should consider ways to assist hopeful homeowners. Some of the ideas floated included allowing first-home buyers to either draw from their superannuation for a deposit or use that money as a security against a home loan, similar to a guarantor. Alternatives could also include direct grants or tax concessions.

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.

Unconventional Economist
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