The fact that the government has come up with so many different ways to pump money into the real estate market (the average price in Sydney for a house is now $1.4 million and $1 million in Melbourne) is the biggest warning sign that government intervention contributes. to the affordability problems of housing , not solve .
The only redeeming part of the latest policy is the requirement that when they sell their home, people taking advantage of the scheme must return the amount they invested plus some of the capital gains to their super.
But this immediately creates a second-round effect.
In five or ten years’ time, when it comes time to move out of Mill Park or Woodcroft in the suburbs for a bigger, better-appointed, and more expensive home, our first-time buyers won’t have the full capital gain on the sale of their first home at their disposal.
By intervening in the first-time buyers market, the government creates a problem for the second-round market.
But this policy is about the here and now.
Both the Coalition and the Workers’ Party could have devised a policy of paying municipalities an ‘increase in supply’ bonus for changing land use laws to increase the number of homes available in their area. It would increase the supply, do it at a much lower cost, and not have such major flow-through effects in areas such as pensions.
That is unfortunately too sensible.
Less than six weeks ago, a parliamentary committee led by Liberal MP Jason Falinski looked at the idea of using super for housing – and did not recommend the form the government has now proposed.
It backed new buyers using their super as collateral, arguing that there were difficulties taking money from retirement accounts and putting them in the middle of a Saturday morning suburban home auction.
“If first-time homebuyers access or borrow against some of their super to buy a home, in the absence of increased housing supply, demand would likely increase and lead to higher property prices,” it warned.
Last week, Morrison attacked Albanian for supporting a 5.1 percent minimum wage hike, warning that it would lead to higher interest rates while driving up inflation.
What would an extra $50,000 in the hands of new buyers do to home prices? It is inflationary and would put upward pressure on interest rates.
And those on the minimum wage — nearly all rent rather than buy — will be priced further out of the real estate market.
Cut through the noise of the federal election campaign with news, views and expert analysis from Jacqueline Maley. Sign up here for our Australia Votes 2022 newsletter.