by Marshall Cobb - Head of New Projects
The housing affordability debate continues, with Victorian State Government announcing an increased first home buyers grant for regional areas, and further stamp duty incentives. Read more here...
Interestingly the blame for the affordability issues seem to be shared equally between current homeowners, property investors, and foreign buyers, which we think is quite unfair ...
Homeowners who purchased 30+ years ago had lower house prices with respect to their wages, but they (we!) still had to scrimp and save to put together a 20% deposit (not 5%), and pay off a mortgage that at times exceeded 15% p.a.
Investors are portrayed as selfish tax evading fat-cats making a motza from their extensive portfolios. However in Australia 85% of property investors only have one investment property, and it was purchased to supplement their superannuation. Surely such prudent investment should be encouraged (not jeopardised), otherwise the burden of paying additional pensions could very well be shifted to the young people of today.
Foreigners can only buy new property, and developers generally accept a maximum of 15% foreign buyers. Surely this is not enough to over-heat the property market.
We think it's about time that first home buyers received some 'tough love', so here is our advice...
1. There are affordable properties out there. But you will pay more than you want to, and the mortgage will cost you more per week than you want to spend - exactly like your parents.
2. Your first home may not be in a suburb where you want to spend the rest of your life. However it will get you onto the property ladder - and that is a much safer place to be than not on it.
3. Stop blaming homeowners, investors and foreigner buyers for the current market conditions. They worked hard and deserve their properties just as much as you do!