Coalition's last ditch FHB scheme will hurt not help first home buyers: Douglas Driscoll

EXPERT OBSERVER

Under the Coalition’s last desperate roll of the dice, first home buyers will only need a five per cent deposit for a mortgage, compared to the usual 20 per cent. However, this is a short-term gain, for long-term pain in my opinion.

Although it makes it easier to buy now, it also potentially burdens them with larger monthly repayments and the prospect of having to pay thousands more in interest to the bank over the lifecycle of a loan.

Ultimately, we want the younger generations to have a grasp on the property ladder – but we don’t want to see them drowning in debt.

With the most recent ABS data showing a decline in first home buyers entering the market – down 0.5 per cent in March and having fallen 10 per cent from March a year ago – I believe the Coalition’s scheme is dancing around the real issue: housing affordability.

In the final days that they have left to scramble for votes, both the Coalition government and Labor are focusing on the wrong elements to improve accessibility to home ownership, with both suggesting band aid solutions.

Modern politics has basically become a popularity contest – and, unfortunately, the Liberal party’s pitch to young voters is not about the long-term viability of the property market.

By cutting the time it takes to save for a deposit by at least half or more, as they said they would do, they’re attempting to appeal to a disengaged audience.

Labor’s negative gearing policy is divisive and does not hold the solution, either. The narrative that negative gearing concessions only benefit the wealthy is factually inaccurate, as two thirds of beneficiaries have a taxable income of under $80,000 per year.

It’s high time there are bilateral discussions between the main political parties – with a long-term view of how to solve the housing affordability crisis.

DOUGLAS DRISCOLL, is the CEO of Starr Partners