In what will come as a surprise to absolutely nobody, a new report from the Australian Housing Urban Research Institute (AHURI) has found that the $20 billion spent by Australia’s governments to ‘help’ first home buyers into the housing market has actually made housing affordability worse and increased inequality [my emphasis]:
This research reviewed first homebuyer (FHB) assistance programs in Australia and seven comparator countries: Canada, Finland, Germany, Ireland, the Netherlands, Singapore and the UK. It considered to what degree such assistance are effective in expanding access to home ownership to those whose entry would be otherwise delayed or impossible, or in making more affordable and less risky the cost of home ownership.
Current Australian first homebuyer assistance measures primarily act to bring forward first home purchase for households already close to doing so, rather than opening home-ownership access to households otherwise excluded. In doing so, these measures add to demand and hence to house prices…
