Fair points, and not disagreeing outright. I agree that Labor’s policy is also pretty poor, and both increase demand without addressing supply. Realistically both will fuel house prices.
I agree 100%, both are inflationary but if it gets people over the line, I’m all for it
Morrison claims that his ‘downsizer’ scheme will assist with supply, but it doesn’t, it just shuffles the deck chairs. This scheme will likely assist second time buyers, upsizing from an apartment to a family home, but then pits first home buyers against cashed up downsizers (with millions in capital growth, at least in Sydney, Canberra and Melbourne) for smaller houses and apartments. If anything this will further exacerbate affordability issues for first home buyers.
Agree it’s only marginal proposition as its naturally evolving anyway, it just gives people more incentive to downsize where they can whereas before it may have an effect on the age pension or health benefits cards being cash rich not asset rich.
An under-appreciated aspect of both policies is they they just kick the ‘deposit issue’ (the single biggest hurdle for first home buyers) down the road and still leave those who take advantage of these policies at a material disadvantage. When they sell their first home to upsize to a larger home, they have to repay the initial benefit, be it to the government or to their superannuation. Therefore they have less equity, and therefore less of a deposit, to buy a larger house. Generally speaking, second time buyers rely on the equity in their existing home for their ‘deposit’ and don’t stump up much in the way of savings. People using the proposed schemes, be it the ALP or LNP model, will need to continue saving while paying their mortgage to be in the same position.
I think its more of a disadvantage in the ALP scheme as they will defiantly lose 40% of the value, of the investment price so those on that scheme will most likely not sell up, it will also most likely make it harder to bequeath as the government will want its money back plus its share of capital gains.
The Coalition scheme means putting that money back into super and depending on how long you reach retiring age there still is the option of using the super to payout any remaining debt on the loan, with the right financial planning its possible to do it with the ALP scheme as well.
I know quite a few who are using that financial planning. I think the main ticker with all this well I can’t see you be able to keep the 1st house as an investment property without having to pay the Government back, but I think its might be possible on the coalition scheme
There are two things that will help address housing affordability: supply and tax reform. However, there are a lot more mortgage holders (roughly 11 mil) than first home buyers (110,000 pa) so anything that might reduce house prices is not a vote winner.
100% agree, as that also has retirement implications, they can tinker around the edges like the are doing but its not really going to amount to much as its all about perceptions for both mainstream parties. You can see that in the media interviews style over substance
With regards to supply, the answer is not green field urban sprawl. Property developers love it as it’s ‘easy’ development, but it creates a myriad of other issues from transport to health and education. At the other end of the scale, the answer isn’t necessarily more high rise towers in large retail and commercial precincts as this doesn’t really help families.
That comes down to local government town planning, but you are right. There is still a lot of land available in the greater Sydney area but that needs to be planned before hand
New Zealand adopted a fairly radical proposal in Auckland (coupled with tax reform, they were two sides of the same coin) where the entire city was rezoned as medium density. This allows for the construction of townhouses and smaller detached houses on relatively large blocks of established housing. This allows for larger properties than apartments, without pushing people into the mortgage belt to commute for 2 hours. The below article is quite an interesting look at the Auckland model, how it could work in Canberra, and why it will almost certainly never happen in Australia.
I am not familiar with the NZ property market, but I don’t think that would work in Australia at the federal level due to the separation of powers between states and the Federal Government under the Constitution, NZ is a unitary state without a codified Constitution.
I think one has to be weary with zoning powers that can create its own inflationary pressures, I have seen areas where the local council rezoned then the property itself price went sky high just because of the potential to subdivide the block. It may work in Canberra because overall its only a relatively small area whereas Sydney is 5.26x bigger than the area of the ACT.
But it would make an interesting case studyhttps://mapfight.xyz/map/act/