I don't think you pay interest, David. (But I'll double check that.) I think you pay for the upkeep. You pay the rates too. That amounts to interest.The State would be covering a quarter of the cost so I suppose they get a quarter of the asset. In any case, you can pay that quarter back later (I would presume with interest but no detail in the article) which might help some.
I think we would be better off trying to reduce the ridiculous price of housing here. FFS I could sell my house, buy an apartment in the middle of Paris, and get change. Unfortunately the policies taken to the last election about getting rid of negative gearing and the capital gains tax concessions failed because of a scare campaign, one no doubt supported by the Murdoch rags.
The biggest issue with this is that it might just lead to house prices going up more, but that would be hard to determine given house prices have already been rising at insane levels for the last few decades.
I reckon it's a winner too Jack.I don't think you pay interest, David. (But I'll double check that.) I think you pay for the upkeep. You pay the rates too. That amounts to interest.
Anyway the biggest issues facing the electorate in the coming months may not be COVID related. I haven't seen any testing on this as yet but I get the feeling from my own straw polls that COVID criticism runs along existing party lines. And that swinging voters see COVID as unknowable and mistakes as understandable/inevitable. As, I said, not that I've seen any actual testing.
There will be other issues. At state level housing affordability could be a big deal. And non partisan.
BTW this kind of scheme was introduced by Bolte back in the 60s. In those days a Liberal government could do such a thing. In 2021 the highbrow Murdoch headlines the scheme as "Victoria's controversial bid to own part of your home".
FWIW I think the scheme is a winner.
Home ownership has plunged from 43% of Australians to just 30% in 20 years, while mortgages and renting has jumped due directly to government failurewww.michaelwest.com.au
Interesting policy, would also reduce the amount people can borrow if they are minimising tax and declaring a lot less income than they actually earn, which would be ironic!
Why not do it, but at the same time why not a few more policies to reduce pressure on house prices.
The thing about house prices is that a fair bit of the pressure on price is a result of people buying properties for investment - mainly speculation on rising prices but also getting rental income. So the prices rise because people are of the view that prices will keep rising and therefore it is a "safe" investment.
So, what we can do to reduce this if the aim is to stop the prices going through the roof as they have been for decades, is to make speculation on house prices less attractive.
Some policies to do this would be: remove negative gearing, remove the capital gains tax discount on profits from selling a house, massively increase public housing to reduce rents.
The problem for government here would be that there is potential political fallout from those who own houses, especially those who bought recently, if the value of their houses fall. Those who bought in the last few years, and likely have massive mortgages, would be furious if the value of their house falls while they still have a massive mortgage to pay off. The trick would be to try and stabilise prices for an extended period rather than have them drop.
I simply see no reason why the house I live in, which cost 5 times my income when we bought it, is now valued at around 20 times my current income which is a fair bit higher in real terms than my income all those years ago. It is simply ridiculous. Yet another market failure, pricing people out of a safe secure roof over their heads is a failure.
Also, might be worth acting now before the inevitable rise in interest rates from their current historic lows. When that happens there will be blood on the streets, possibly even literally.
Never heard of this one. That's a big slice of the gain made from selling off a farm.
Thanks. Lockdown really helped, I just have to live like lockdown forever! I started working for myself in 2019, I could never have done it on a disability Support worker employee wage.Congratulations that is awesome news. And well done on having a deposit.
Having a deposit is the hardest thing for so many people that for many reasons live week to week by there own actions or what’s forced on them.
I was once told by a finance specialist I really rate is that earning and keeping your first $100,000 cash, shares etc, is harder than making your next $900,000 cash, shares, property etc. And it’s true.
There are a few options for her if your income is high enough, and you can show that you can save part of it. Many turn to the bank of mum and dad to get a gift of the first deposit or use the equity in their parents home to get the 20% needed.Well done Barbieup, so difficult to buy a house now, so much easier for a lot of us a few decades ago. How you save a deposit with the rents these days I really don't know.
My daughter just figures the only house she will ever own is the one she inherits when we die.
There are a few options for her if your income is high enough, and you can show that you can save part of it. Many turn to the bank of mum and dad to get a gift of the first deposit or use the equity in their parents home to get the 20% needed.
The catch will be in later when rates hit 5%.
Below is a really balanced article. The most important thing is that the person getting the support has the right traits regarding savings etc to pay the loan.