Just when we thought this federal election couldn’t get more interesting, ScoMo comes along and ups the ante with an effort to buy votes from – I mean appeal to – first homebuyers.
And it’s absolutely brilliant!
ICYMI, under the new home deposit scheme, the government plans to offer loan guarantees for first homebuyers, allowing them to buy properties with deposits of just 5 per cent.
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At the moment, buyers need to save a whopping 20% of a property’s purchase price – sometimes you can get away with a 10% deposit, but in this instance you have to pay a hefty lenders mortgage insurance premium.
Morrison’s proposed scheme will fund the National Housing Finance and Investment Corporation to the tune of $500 million, with another $25 million earmarked to set the program up and research the housing market.
Should his party be re-elected this weekend, the program will be rolled out from January 1 next year, and will allow first home buyers with an income of up to $125,000 per person (or $200,000 for couples) access to the guarantee.
This is going to offer a massive leg up to those keen to buy a property – and in my view, it’s a golden opportunity for first time buyers to get into the property market.
It’s definitely preferable to the plans that Labor are proposing to roll out from January 1, which is to strip negative gearing benefits from established investment properties.
This will only result in investors fleeing the market, which will decrease the amount of rental supply and push rents up… making it very difficult for first home buyers to save their deposit.
Not everyone is in favour of the policy, of course.
Independent MP Kerryn Phelps is concerned “that if people are going to be borrowing 95 per cent of the cost of a house, and with the falling property market, if they get into mortgage stress and they’re not able to make repayments… then people may find they’re in a situation of having to sell that property and they owe more than they own,” she said during an interview with Sky News.
Following the Royal Commission, it’s hopeful that the banks will be cautious enough not to lend to people who can’t afford the loan.
What the public thinks of this policy will play out at the polls on Saturday – make sure your voice is heard! Find your electorate here.