Housing affordability has regained its forefront of the political debate as voters gear-up to vote on April 18th.
Labor’s proposed to reform negative gearing and capital gains tax.
While Prime Minister, Scott Morrison surprised Australians with a new policy of his own during his speech at the Coalition’s campaign launch in Melbourne.
The Prime Minister often points to figures showing a resurgence in first homebuyers to defend his government’s record on the issue. However this week, he admitted it was still too difficult for firsthome buyers to break into the property market.
“We need to go further. It’s hard to save for a deposit. Especially with the banks pulling back and larger deposits of 20 per cent now being standard,” he said.
“It is not getting easier. We want to help make the dreams of first homebuyers a reality. So we have decided to go further at this election.”
The new policy he announced is similar to one the New Zealand government has been running for years. It will allow first homebuyers below a certain income threshold to secure a home loan with a deposit of as little as 5%.
These thresholds being $125,000 for singles and $200,000 for couples.
“This will make a big difference, cutting the time taken to save for a deposit by at least half,” Mr Morrison said.
He stressed the scheme was not “free money” and that the usual checks banks run on borrowers would still apply.
“They will still do all the normal checks on the borrowers to make sure they can meet their repayments,” he said.
But the Prime Minister argued the idea would help people get “their first leg on the first rung” of the property ladder.