Among the bolder claims[1] in last month’s budget was that “under the Coalition, home ownership will always be supported”.
Since the Howard government took office in 1996, the proportion of Australian households owning the home they live in has fallen from 70% to 66%[2].
In the lead up to the budget, home prices began climbing again, soaring 8.5% so far this year in Melbourne and 11%[3] in Sydney.
Extending the First Home Loan Deposit Scheme[4] will allow 10,000 more first home buyers to buy newly-constructed dwellings with a 5% deposit.
Read more: Paying off a home loan used to be easier than it looked. It's now harder. Here's why[5]
A separate new Family Home Guarantee[6] will allow 10,000 single parents to buy a new or existing home with just a 2% deposit.
The measures have similar problems to the First Home Owners Grant schemes[7] in place intermittently since 1964.
Homebuilder, used for knockdowns and rebuilds. Twin Sails/Shutterstock
A separate measure since closed, HomeBuilder[8], awarded grants for the construction of homes, but it was also available for knockdowns, rebuilds[9] and extensions rather than being directly targeted at increasing supply.
Only three economists responding to the Economic Society of Australia’s post-budget survey[10] referred to the housing measures and none were supportive.
Our calculations[11] using NATSEM[12]’s STINMOD+ model suggest that even if these schemes were not limited to 10,000 applicants, there may not have been many households able to take them up.
Read more: HomeBuilder only makes sense as a nod to Morrison's home-owning base[13]
NATSEM[14] The schemes would be more helpful for potential homebuyers in regional areas than in cities, but they are less likely to have the income and savings needed to take advantage of them. The schemes also have price caps[15] below the median house price in most capital cities, making it hard for people such as parents who need extra bedrooms to take advantage of them. The downsizer initiative will help A more promising initiative in the budget is lowering the minimum age at which downsizers can access the downsizer contributions scheme[16] from 65 to 60. This scheme allows older Australians to downsize and put the proceeds into lightly-taxed superannuation. This will free up family homes for the younger generations, although it will not help those on low incomes buy them.
^ bolder claims (ministers.treasury.gov.au)
^ First Home Loan Deposit Scheme (www.nhfic.gov.au)
^ Paying off a home loan used to be easier than it looked. It's now harder. Here's why (theconversation.com)
^ Family Home Guarantee (www.nhfic.gov.au)
^ First Home Owners Grant schemes (www.smh.com.au)
^ HomeBuilder (treasury.gov.au)
^ knockdowns, rebuilds (treasury.gov.au)
^ survey (theconversation.com)
^ calculations (stinmod.canberra.edu.au)
^ NATSEM (www.governanceinstitute.edu.au)
^ HomeBuilder only makes sense as a nod to Morrison's home-owning base (theconversation.com)
^ NATSEM (stinmod.canberra.edu.au)
^ price caps (www.nhfic.gov.au)
^ downsizer contributions scheme (www.abc.net.au)
Authors: Yogi Vidyattama, Associate Professor, National Centre for Social and Economic Modelling, University of Canberra
Read more https://theconversation.com/heres-what-the-budget-did-to-get-australians-into-homes-hint-not-much-160773