Budget 2021: Another affordable housing non-solution
THE new Family Home Guarantee Scheme offers 10,000 guarantees over four years to single parents with dependants. The scheme allows a single parent with an annual income under $125,000 to buy a home with a deposit of a minimum two per cent.
At the same time the maximum amount of voluntary contributions that can be released under the existing First Home Super Saver Scheme is increased from $30,000 to $50,000.
Note that only voluntary contributions can be released, not compulsory contributions.
Any single parent with a salary under $125,000 will be hard-pressed to make any voluntary contributions to their super, let alone a total of $18,000, which is about 2 per cent of a home of median value in Sydney. Then there’s stamp duty to worry about.
The aim of these two schemes is to make things easier for people finding it difficult to buy a home. However, it seems a very round-about way of achieving that.
House prices are high because supply doesn’t match demand.
Increase the supply and prices will go down.
But what does the Government do: free up more money to chase after the same number of homes.
The result is predictable: prices go up even more.
The First Home Super Saver Scheme might be a good idea if the Government fixed up the supply of housing first.
As to the Family Home Guarantee Scheme, it allows participants to load up on even more debt than ordinary human beings. What happens when the interest rates start going up?