Five Percent Deposit Scheme, Thoughts?

Trying2SaveABuck on 01/10/2025 - 07:02
Last edited 01/10/2025 - 07:03

So i personally feel almost all government intervention that pumps the housing market is a 'bad idea' - i also dont agree with taxing investors to high the havens either. But when i orginally heard of the 5% deposit scheme i thought 'it could work' but the more i think about it it seems like terrible idea.

I read an article by the barefoot investor and essentially he made the point all this does it pile on debt to people who would be ultra-valunerable to interest rates
https://www.news.com.au/national/insulting-barefoot-investor…

Now with everything i post, ill try and be 'balanced' - i do think the 'government' on both sides have no solution to the housing crisis they are addicted to the revenue at state and federal level they get from property taxes and they are addicted to the pumping of GDP via migration. With that said i do think the government is 'trying to help people' get into their own home with this scheme.

Certainly there would be people that need to get their 'foot in the door' to get out of the 'rent trap' ? it would benefit them so there is merit to the scheme….

but logically speaking if you cant save 10-20% deposit i dont know if taking 100s of 1000s if not millions of dollars of debt is 'wise' - the cash rate isnt always predictable and the median house price in Australia is like $850k meaning you would have a loan of $807.5k (including duty costs)

i mean depending on your rate you will likely be paying between 45-50k in interest! - i mean looking at the numbers is this a 'bad idea' ? and more a bandaid to a bullethole solution?

Part of me feels it could be a disaster and part of me thinks it 'will get people into their own homes' the other arguement is this will just pump the property market more making it more out of reach for people in the longer term….

Poll Options

  • 27
    5% Scheme is a Great idea
  • 379
    5% Scheme is a Terrible idea
Home & Garden

Comments

    • Jake D on 01/10/2025 - 12:08
      +13

      What does that even mean?

  • ihbh on 01/10/2025 - 07:40
    +18

    Just look at the extremes. 100% is too much, so over time, society has settled with ~20% - to allow for fluctuations in property prices, while generally protecting the lender in case the borrower can't make repayments.

    The other extreme of 0% is idiotic. No lender in normal circumstances, will lend at this amount.

    And 5% if pretty close to 0%.

    Just wait until the Aus market crashes or goes sideways for decades. Then we'll see who's swimming naked.

    • ginormousgiraffe on 01/10/2025 - 08:26
      +13

      The entire point is that it's insured, and even if the value drops more than 5% realistically home owners will not sell out of their properties

      • ihbh on 01/10/2025 - 08:41
        +11

        Insured means a liability on the govt balance sheet if prices fall significantly. That is a big negative - e.g. excessive can affect credit rating; taxpayers have to fork out to cover.

        • ginormousgiraffe on 01/10/2025 - 09:10
          +6

          Yeah the gov underwrites it but it won't impact our credit rating, but perhaps it will cost government funds in a worst case situation and if that happens then house prices will be the least of our worries.

          The facts are that this program already existed, up to 35k places per year, but they have increased the eligibility to be people that earn more money. I'd guess that these people added to the program that earn above 200k will be very low risk of not making mortgage repayments anyway.

        • Cyphar on 01/10/2025 - 12:26
          +2

          Which is another reason why the govt will never institute policies that will see prices stagnate or fall.

        • ol mate on 01/10/2025 - 19:10

          It's only an issue if:
          1. House prices fall more than 5%
          2. People start going bankrupt or walking away (and getting declared bankrupt).

          These are two things that, in isolation, are unlikely on a wide scale and even less likely to occur together

        • frewer on 02/10/2025 - 04:44
          +4

          This sounds like American before GFC. But the government involves early on. When the insolvency pile up, we will have GFC 2.0. Look at government debt, now rate on hold, inflation not going down, short supply in housing, no cheap energy, house prices making new all time high, AND uncle Sam is shutting down over there, our mining export is slowing down. Meh probably nothing…

      • garage sale on 01/10/2025 - 21:32
        +1

        yep, people need to live somewhere, being at the mercy of a landlord sucks big time, if the market falls people just stay in their houses and keep paying off the mortgage, at least you don’t have to worry about moving and finding new rental.

    • JIMB0 on 01/10/2025 - 08:38
      +12

      The other extreme of 0% is idiotic. No lender in normal circumstances, will lend at this amount.

      There used to be 105% loans before the GFC.

      Just wait until the Aus market crashes or goes sideways for decades.

      They've been saying this for decades, yet market forces keep driving prices higher.

      • ihbh on 01/10/2025 - 08:43

        There used to be 105% loans before the GFC.

        There are outliers for everything and fads/bubbles because people have short memories. The outliers vs the rest of predominately sensible lending over most of the cycle is what I'm referring to.

      • Cyphar on 01/10/2025 - 12:28

        There used to be 105% loans before the GFC.

        Yep this is how I got in when my mum acted as guarantor. It covered the conveyancing and stamp duty costs, Great as a 20yo but prices were still low enough 20 years ago for this to be feasible. No way this would be a good idea when avg house prices are now over $1m

      • ferry594 on 01/10/2025 - 15:49

        There used to be 105% loans before the GFC.

        And now there aren't. For good reasons.

    • TheMills on 01/10/2025 - 12:57
      +1

      Market crash, that didn't happen during covid when people didn't have jobs and had nonsalary for a year. What do u think can make that happen when migration is at its peak?

    • supersabroso on 02/10/2025 - 11:10
      +2

      There's nothing to worry about, it's not like people on Centrelink are suddenly going to be able to buy $1.5M houses because they managed to save up a 5% deposit lol! You still have to be able to service the loan, as such this lets people who are earning enough income get their foot in the door faster without having to pay expensive lender's mortgage fees & additional deposits that take years to save up. The poorer people have already been getting access to this scheme for years without issues, now it's opened up to the middle class/rich people as well, they are far less likely to default. Since Australia is against any policy that lowers house prices by removing tax funded investment breaks, the next best thing the government can do is remove obstacles for first home buyers so that they get a leg up vs the investors who are getting 47% discounts on all expenses in addition to the taxes they need to pay on profits.

    • Pinchy on 02/10/2025 - 13:10

      The low-mid end of the market will never crash. Unless the whole world turns to shit.

    • frewer on 02/10/2025 - 15:00

      I wonder when the systematic collapse will happen https://prnt.sc/fQfH7BBK50MU. Maybe never …

  • Stealtho on 01/10/2025 - 07:42
    +26

    Houses in the low $700's will def all be $799,999 now, in rural areas.

    • JIMB0 on 01/10/2025 - 08:45
      +26

      When they got rid of stamp on houses less than $600k for first home buyers, that became a bottom price for all houses. All government intervention does is drive up prices.

      • Stealtho on 01/10/2025 - 09:33
        +2

        In my area anything around $600k needs a $100k plus Reno.

        • smartazz104 on 01/10/2025 - 12:40
          +12

          needs a $100k plus Reno

          Oh, so just a new kitchen then /s

      • DashCam AKA Rolts on 01/10/2025 - 09:40
        +3

        When the only government policy is intervention focused on the first home buyer, the prices are driven up.

        Government policy needs to be inclusive of private housing investment;
        - taxes, both federal and state based that input into the final pricing of housing;
        - government housing supply;
        - supply of trades people & materials;
        - and finally the real estate retail structure, which has an incentive to push prices as high as possible for the % they are paid.

        Simple solutions such as lowering the % of the price as a required deposit, borrowing from Super and first home owner grants seem to have a net negative effect by encouraging the house market to automatically adjust upward, every time.

      • TheMills on 01/10/2025 - 13:00

        The REA's first question is: Are you a first home buyer? Yes: Fantastic all the govt. rebate can now go into my pocket 🥳.

        Rather, the Govt. could pay the interest component on the loan on behalf of the 1st home buyer in instalments directly into loan account upto the $ incentive applicable.

      • JimB on 02/10/2025 - 10:54

        Depends on the area.

        In some regional towns, houses can still be found in the $300k mark

  • 6079 Smith on 01/10/2025 - 07:46
    +29

    Most of the commentary I’ve seen around this kind of ignores the fact that if having to rent for an extra 5 years to save up for a 20% deposit you’re going to be worse off compared with the extra interest incurred on a 5% loan

    • ferry594 on 01/10/2025 - 15:50
      +1

      And then the people AFTER those buyers will be worse off as now prices are much higher.

      • supersabroso on 02/10/2025 - 11:26
        +2

        How much higher do you think they can go with this measly scheme? Treasury estimates put it a 0.5% increase in house prices as a result of this. Since 2020, it's helped 243k Aussies beat the shackles of rich investors and own their own home instead of staying as rent slaves. This is only 3.7% of the housing market compared to the rich investors are buying up 37% of the current housing market. So if you're worried about house prices going up, start looking at the investors instead of the first home buyers who need to rely on this 5% scheme in order to get ahead of the rich people buying up all the housing stock creating fake scarcity in order to increase prices.

    • froggym on 03/10/2025 - 07:16

      So true. We bought using the 5% scheme back in 2020. If we'd waited to save a bigger deposit we wouldn't be able to afford the house we have now or any house really.

  • GordonD on 01/10/2025 - 08:06
    +12

    Politicians logic:
    we have to do something
    this is something
    so we have to do this.

    • smartazz104 on 01/10/2025 - 12:41
      +2

      Say we will do something
      Let everyone argue
      Don't do the thing
      Mission Accomplished

      • MrFrugalSpend on 03/10/2025 - 07:51

        Don't forget the classic…

        Say we will do something
        Budget for that something in NEXT term's budget
        The relevant government department spends a bunch of time and money promoting getting ready to do the thing
        (…when it turns out that something is expensive, budget is blowing out, and is poorly received by public - next term):
        … Delay or stop doing the thing
        Announce that you've "SAVED" billions from the budget by cutting that unpopular thing
        Post marketing about your wise economic decisions

        … politics 101

    • RedHab on 02/10/2025 - 15:22

      What is does is make the government (taxpayer) liable for any possible loss, as they are now the insurer of the homeloan.

      Pretty much means governments will keep pumping house prices higher by all mean necessary.

  • Gdsamp on 01/10/2025 - 08:15
    +3

    does a little bit now to help affordability for the set of FHB in spitting distance of buying in the market today

    but will push all low end properties towards the caps
    Therefore increase prices of properties above the cap due to more competition
    and FHB over paying for these pushes out some investors dampening IP demand /rental supply at low end

    keep in mind the lender still have to assess the fhb as able to service the bigger loan

    • Gdsamp on 01/10/2025 - 08:19
      +3

      Having said that
      prices to go up more because demand remains too high and supply insufficient
      PM for landlords will Keep importing way more people than we can house

    • Gdsamp on 01/10/2025 - 08:26

      Perth median to cross $1m by Dec 2026

  • Starlight8 on 01/10/2025 - 08:17
    +7

    I think with this incentive property prices will go up. Supply being low and high demand …

  • DingoBilly on 01/10/2025 - 08:43
    +20

    It's terrible. Sounds good on paper but just kicks the can down the road. Future FHB (and any buyers) will just end up paying more for houses.

    Really wish people could have voted in the Labor pushing negative gearing removal in 2015 or whenever it was. Would have significantly reduced these issues and encouraged Labor to do more instead of these baby useless changes. Moron Australians.

    • ginormousgiraffe on 01/10/2025 - 09:14
      +2

      Agree it should have changed but I don't believe it would have much impact on property prices. Land tax and investment property taxes would have a much better result.

    • JimB on 02/10/2025 - 11:00

      Labor nor no party pushed for negative gearing removal back in 2016-2019.

      Labor wanted to restrict it to new properties only which I think makes sense.

      You're confusing it with Labor's push to remove refund of franking credits- this is what loss them the election. The elderly and retired didn't care about negative gearing, they do care about franking credits though.

      • whyisave on 02/10/2025 - 17:48

        You're confusing it with Labor's push to remove refund of franking credits- this is what loss them the election

        The negative gearing proposal and the franking credits refund removal, were both part of Bill Shorten's Labor policy, taken to the 2019 federal election.

        REVIEW OF LABOR’S 2019 FEDERAL ELECTION CAMPAIGN
        https://alp.org.au/media/2043/alp-campaign-review-2019.pdf

        • JimB on 02/10/2025 - 18:32
          +1

          As I said, Labor only wanted to restrict negative hearing to new properties, not cancel it altogether.

          Even the report said changes to, rather than remove NG.

    • michaelTito on 02/10/2025 - 23:11

      is there anything stopping them from doing it now while in power? genuine question btw

  • Ryanek on 01/10/2025 - 08:47
    +1

    OP, I'm curious… how did you go about buying your first home?

    • Trying2SaveABuck on 01/10/2025 - 09:43
      +28

      legit worked 7 days a week 3 jobs i was 23 property was a old POS in Keilor Downs but it was my 1st step on the ladder - i had a 20% deposit + duty

      Full Time Health Care

      Contract at a medical center after hours

      Woolworths/BWS on weekends

      • Ryanek on 02/10/2025 - 10:14
        +4

        Username checks out

  • Nonce on 01/10/2025 - 09:24
    +14

    thank gawd I got in the market in the early 2010s, what a crapshow it is now to buy a house

    • whyisave on 02/10/2025 - 17:54
      +2

      I remember in 2012, in north-western Sydney, I approached a real-estate agent, when I went to inspect the property (~15000 or 20000 sqm for $550K - 700K), but was discouraged several times, because the area was in a flood-zone.

      I wish I ignored them and 'sank' whatever money I had at that time (which I didn't, but still…)

      But yeah, I agree with you, .. even 2010 - 2015, the prices were still decent to get into the property market, and the interest rates were around 6 - 8%, but heading downwards until the 2020 Covid period.

  • tenpercent on 01/10/2025 - 10:03
    +22

    The housing crisis is due to this: population growing too quickly + number of houses growing too slowly.
    It includes (1) people who own their own home, (2) people who are renting, and (3) people who are homeless.

    The 5% deposit politician brain fart is just going to help push a small number of group (2) into group (1) (but only people who were almost ready to do it on their own anyway). This will just pump demand for 'cheaper' houses. But since there will be no change in the rate of new houses increasing supply, then the prices will simply go up. At the end of the day the remainder of group (2) will be pushed even further away from being able to have a go at moving into group (1).

    If politicians wanted to help the housing crisis they would slow the population growth (i.e. limit mass immigration) and simultaneously implement policies to rapidly increase the supply of new houses (without giving away crown land for less than market value to their private developer mates who will invariable just land bank it and drip feed it into the market over the next decade/s to extract maximal gains). But they're all crooked on both sides, so it will never happen.

    • smartazz104 on 01/10/2025 - 12:45
      +2

      Time to ban people with investment properties from entering politics altogether…

      • rezdo on 02/10/2025 - 06:40
        +6

        Agreed, divest their portfolios or should be made to wear a jersey.

        This scheme is an okay gesture, but it's like putting a micro bandaid on an oozing boil. Grandfather negative gearing on more than 1 property, remove generous capital gains discounts, and treat housing like the rest of world, a place to llive. Abolish short stay housing like airbnb.

    • bargaino on 02/10/2025 - 09:54
      +1

      number of houses growing too slowly.

      In Sydney, last I heard, they are actually demolishing houses faster than building them. Houses are for the rich now, like in Singapore or Chinese cities.

      • tenpercent on 02/10/2025 - 15:19

        That's the other thing. Many of the "new builds" in the stats aren't actually additional dwellings. It's knock down one + build another. So net zero change in total supply.

        Or if what you're saying is true, rich people are knocking down houses for fun? To expand their mansions? For extra lebensraum with a bigger backyard? Then it's even worse.

        • bargaino on 02/10/2025 - 16:00

          No, not that.
          Houses are being demolished and replaced with a row of townhouses, or even a block of apartments.

          Imagine you are an average person living in an old weatherboard house on a 1/4 acre block you bought 40 years ago when you married. Congratulations! You are now a multimillionaire. But council rates are based on unimproved land value, so you pay the same rates as the mansion next door. You cannot afford to stay, so house gets demolished.

          That is the market at work in a rapidly growing city.

  • netjock on 01/10/2025 - 10:14
    +11

    Vote buying. People will thank the ALP for it. Strange but people will do anything to get on the property ladder thinking it is roads to riches. People who lose money just don't tell you.

    • ForkSnorter on 01/10/2025 - 10:47
      +14

      Agree. Labor is not trying to solve the housing problem at all. This is nothing but vote buying.

      They've bought the vote of property investors by making no changes to negative gearing.

      They've bought the vote of 20-35 year olds with less than $50k savings because these people can now buy a house.

      The notion that is is now normal to borrow nearly 10 times your salary in an economy that is rapidly destabilizing as AI takes people's jobs, is insane.

      How about the rational people who just want stable (and affordable) house prices and don't want to compete with a 20-year-old who's willing to borrow $800k?

      Labor doesn't care.

      Labor wants you to pay more to own a house.

      • whyisave on 02/10/2025 - 17:59

        This is nothing but vote buying.

        If you improve the lives of people, is that counted as 'vote buying' ?

        I mean, the mafioso in Italy or H-zbullah in Lebanon were taking care of the people, by removing the rubbish, improving sanitation, etc. etc… that the populace actually supports organizations that looks after the people (and opposed the government somewhat in those places).

        I'm not saying Labor is good or Liberal is bad, but whenever governments help out a section of the population, that section will normally want to reward them back with a vote.

        Look at the migrants that arrived into Australia in the 1980s,… who are still very staunchly Labor supporters, even those migrants are anti-Rainbow agenda.

  • spackbace on 01/10/2025 - 10:49
    +1

    https://www.immigration.govt.nz/live/setting-up-your-life-in…

    Generally, you can only buy residential property in New Zealand if you are a citizen, or a resident who meets certain criteria. You may also require consent from Land Information New Zealand before you can buy.

    That's what NZ did to try to stop the issue getting worse

    But also:

    In September 2025 the New Zealand Government announced its intention to change the Overseas Investment Act to allow overseas based investors with an Active Investor Plus Visa, Investor 1 Resident Visa or Investor 2 Resident Visa to buy or build a house valued at NZD $5 million or more.

    • ginormousgiraffe on 01/10/2025 - 11:10
      +4

      Around 1% of homes are bought by non-australians, probably a large chunk of those are still residents anyway. But agree that non residents shouldn't be buying in Australia.

      The gov has implemented programs to boost tradies to eventually be able to build more homes, it needs to be a long term strategy because otherwise we will need to import people to build homes who will then need a place to live themselves anyway.

      NSW gov has also changed zoning laws to make high and medium density easier, but again it will take 5-10 years to see the impact.

      • ThithLord on 01/10/2025 - 13:11
        +1

        Long-term strategies? Preposterous. This sub will settle for nothing short of a click of the fingers to sort a housing problem that is a few decades in the making. It really is that simple; "just solve the materials shortage" "just solve the gaping labour shortage" and fifty other things that, realistically, take decades of good policy to slowly grind away at.

    • freefall101 on 01/10/2025 - 12:24
      +3

      Australia has done the same thing. Used to have to be waiting for PR or here over 12 months, now it's a flat ban unless you have PR - https://www.ato.gov.au/individuals-and-families/investments-…

      The problem in Australia for the last 6 years has been supply, not demand. Yet so few governments have taken real steps to fix supply in decades. There's a really good reason property developers are banned from giving political donations in many places, they were manipulating the crap out of the housing market (and still are) to keep prices high. And the pollies are all invested in property, our wealth is tied up in it, the risks of decreasing prices are huge. So it's easier to kick the can along with increasing prices.

      One of these days we'll recognise we've tied trillions of dollars up in a mostly unregulated housing market that's at the whims of local councils and put in a proper regulatory body. Hopefully.

  • capslock on 01/10/2025 - 10:50
    +1

    Non home owners can afford to buy a house.
    Home owners will get rich as their houses go up in value.
    Win win for everyone.
    Well except maybe for Generation Alpha and Beta.

    • ForkSnorter on 01/10/2025 - 10:54
      +8

      Win win for everyone.

      Except for the people who don't want a soul-crushing mortgage.

      Except for the people whose jobs will be taken (or have been taken) by AI.

      Except for the older people who were planning to downsize to a smaller house to reduce/pay off their mortgage.

      Except for the people who were hoping there would still be reasonably-priced properties somewhere in Australia.

    • Clickbait on 01/10/2025 - 16:33
      +3

      Home owners don't get rich as their houses go up in value.
      If they sell, they have to find another house.
      How much of their "rich" will the Govt steal in duties?
      Same with the nonsense about Boomers downsizing to free up the market.
      Most have been living in the same house for over a generation, and will blow a fortune trying to sell an unrenovated house to an age group that doesn't know which end of a nail to use.
      Then there's the cost of the replacement house, old age renovation, not to mention the dislocation.
      The real story is that oldies would be a lot more inclined to sell if they could "gift" some of the return to their children.
      But, and bless the government, this could cost them their pension and taxation on their "gifts"

  • urahara on 01/10/2025 - 10:52
    +4

    I own a house and I think 5% scheme is a terrible idea

  • bargaino on 01/10/2025 - 12:53
    +3

    Great idea for whom? Increasing demand and risk is good for sellers, bad for buyers.

    In the short run anyway. It sounds like we are talking sub-prime mortgages here.

  • Seaeagles on 01/10/2025 - 12:56
    +1

    It’s not going to help the majority.

    It doesn’t change your borrowing power, if the banks determine you can afford to service a $750,000 loan and have a 5% deposit then you’re looking at a $790,000 property.
    With 20% deposit you are looking at a $940,000 property.

    Add the few that it helps it’s going to push the market up making the cheaper properties increase out of reach for who this is supposed to help.

    • Gdsamp on 01/10/2025 - 13:21

      it slightly improves borrowing power as under the scheme FHB gets same rate as if it were an 80% LVR (better serviceability) and loan doesn't increase to capitalise lmi

  • studentl0an on 01/10/2025 - 12:59
    +5

    Why only 5%, why not $1? Surely that will be even better for the banks and sellers, because that's who this policy is ultimately for?

    • Trying2SaveABuck on 01/10/2025 - 13:12
      +4

      Dont give the Politicians more ideas to pump the market lol

      • studentl0an on 01/10/2025 - 13:13
        +3

        I think they would need at least 6 months of bi-weekly catered meetings to come up with the idea themselves. I just saved them all that productivity.

  • Cluster on 01/10/2025 - 13:55
    +2

    Everyone knows what the answer is to more affordable housing: Build more affordable housing.

    Just making it slightly easier to get a loan, or get an even bigger one, just pumps up real estate prices even more as more money is now chasing the same amount of stock.

    It's weird that politicians lose all common sense and reason when looking at the problems of affordable housing. They sit around scratching their heads wondering what to do, but won't aid the most obvious solution.

    This is not a Labor or Liberal problem. Both sides are ignoring the core issue.

    • ForkSnorter on 01/10/2025 - 15:06
      +2

      It's because being a politician is not the same thing as being an intelligent person.

      Albanese comes across as a nice guy and decent leader, but he's absolutely braindead and uncaring on some issues.

      The last intelligent Australian leader who truly cared about fairness was probably Paul Keating.

      • pupdog on 02/10/2025 - 13:24

        I'm not sure that it's a lack of intelligence so much as political will. Albanese is reluctant to take action that may undermine housing prices and.piss off a lot.of voters.

        • ForkSnorter on 02/10/2025 - 15:36

          But he's not reluctant to increase demand, thereby pushing already bloated house prices higher.

    • mavis30551 on 01/10/2025 - 16:20

      Except Labor have pledged 10 billion dollars to build new affordable homes.
      Some have been built, and they will continue to ramp up and churn them out. Admittedly slow to start, though, which is an issue with Government in general and housing, which is red tape. But this is not unique to 1 side.

      Compare that to how many affordable homes were built by the previous government and if its not Zero its very close - hard to find figures actually.

  • iDroid on 01/10/2025 - 14:13

    It's an awesome idea if you want house prices to go up.

    ..shakes head..

  • relentless on 01/10/2025 - 15:32
    +1

    It's also to create debt slaves

    • whyisave on 02/10/2025 - 18:04
      +4

      That's the entire basis of the Anglo-Capitalist model.

      Any country that resists debt, has a war waged in there, and then offered rebuilding services (which is DEBT).

      Look at the wars of the last 40 years….the aftermath, is a country and society that is heavily in debt, which they did not have before.

      Also, look at the countries at why the population does not have a sovereign wealth fund, ie. the same Anglo-Capitalists come in and stop that idea for the people to have a little bit of money in their name.

      • relentless on 02/10/2025 - 22:52

        War also leads to survivors who can be funnelled to the warmonger states for cheap labour. Exploit or be exploited, until AI can better replace us.

  • mavis30551 on 01/10/2025 - 16:09

    I mean people can argue it will drive prices up. I would say they have being going crazy forever anyway.
    They should toss negative gearing, that would help for a start

    • hasher22 on 01/10/2025 - 17:08
      +1

      Inflation is good when it's steady, slow rise. Not when it hits us in a very short time.

    • JDMcarfan on 01/10/2025 - 17:11
      -1

      negative gearing is not a bad thing when used correctly.
      Australia needs more homes desperately….. Not everyone can afford them.
      To accommodate you have renters. Someone needs to build and then own these houses.
      Building these houses should be encouraged. Investors looking to assist the construction of these houses, should be encouraged.
      Negative gearing, if restricted to new/near-new builds, will promote cash inflows to new house construction which is needed in Australia, and funnel cash away from older, already established houses.
      The current across the board benefit isn't useful anymore (whilst still being good in principle) as it provides no incentive to develop new housing.

      Also, NG doesn't influence house prices nearly as much as CG discounting (50/100% discount).
      The tax benefit for most $1m homes, is $25-30k per annum pre-tax (or about 12-15k post).
      Again restricting to new/near-new houses (i.e. 2nd owner onwards doesn't receive it) makes the capital appreciation stunted, whilst still allowing the initial owner (supply provider) a benefit for improving housing supply.

  • techno2000 on 01/10/2025 - 16:22
    +1

    If every ordinary home in Australia costs $10 million and we put everybody on 100 year loans,Australia would be the richest country on earth and you,your children and your grandchildren can spend your entire lives slaving away to own a cardboard box. YAY

    • MindGrenadius on 02/10/2025 - 13:58

      This whole scam requires masses of gullible people believing high house prices are a good thing and will continue to approach extremes like this until they realise it.

      High house prices are a net negative for society as a whole for everyone except banks. Even those that own investment properties growing in price can gain no benefit without either selling and creating a new mortgage for that buyer, or extracting that wealth from renters, and high rents greatly effect the wider economy as those renting then have less to spend on other goods, damaging the economy as a whole.

      • whyisave on 02/10/2025 - 18:07

        High house prices are a net negative for society as a whole for everyone except banks

        The banks "own" the country (and/or governments).

  • pwnd on 01/10/2025 - 16:41
    +7

    As somebody that is about to advertise our circa ~ $800k house, I am in favour.
    Once we have sold our house, I heavily oppose this initiative.

    • JH100 on 02/10/2025 - 20:47

      🤣

  • Clickbait on 01/10/2025 - 16:45

    Pete Seeger revealed the future of economic policy 60 years ago
    https://youtu.be/XUwUp-D_VV0?list=RDXUwUp-D_VV0

  • hasher22 on 01/10/2025 - 17:07
    +3

    And this solves the home supply and prices how?

    It will just inflate it even more

  • OzzyOzbourne on 01/10/2025 - 18:10
    +1

    Subprime lending, if house prices don't keep going up, interest rates don't keep dropping and unemployment doesn't stay low, we'll have our own gfc

    • Trying2SaveABuck on 02/10/2025 - 06:49

      In fairness a GFC would crash the housing market and probably be good for longer term afforability.

      But short term it would be bad

  • brendanm on 01/10/2025 - 18:16
    +4

    I don't have an issue with this provided it isn't pushing people to the boundary of affordability. Rent isn't far off a mortgage, so if they can rent, they can likely afford a house. If they have to save for another 5-10 years to get a 20% deposit, house prices will have increased so much that their 20% deposit is now a 10% deposit.

    In saying that, of course it's going to increase prices, everyone they try and manipulate things with "free money", that's what happens.

    Perhaps the government should work on reducing the demand, however I doubt that will happen, they love seeing GDP rise, while GDP per capita and standard of living drops. The politicians are still fine,nso why change anything.

  • hachaboob on 01/10/2025 - 18:46
    +6

    It doesn't make houses more affordable.

  • Blargman2001 on 01/10/2025 - 19:00
    +2

    This is part of the governments solution to kick the can down the road. Eventually once Australia becomes so expensive that even migrants stop coming, we all get old, stop having babies, population growth will halt, and we suffer a demographic collapse, only then will houses be cheaper.

  • MindGrenadius on 01/10/2025 - 19:06
    +2

    They won't market it as what it really should be: 95% mortgages. The very last thing this absurd ponzi housing market needs is yet more leverage and more debt.

    I know people having been saying it for 20+ years but this market won't go on forever. Like in NZ & Canada it will start to unwind. Immigration is not an unlimited and infinite source of money

    For perspective 5-6% APY growth in housing has never gone on, anywhere in the world, ever, for more than 10 or so years without unwinding disastrously. Australia is a legitimate world-first at 30 years and unless you believe our economy is run perfectly, the market will naturally force prices back where they belong.

    • Lunarboogie on 02/10/2025 - 06:30
      +1

      Sounds like Japan. It will be interesting to see them manage their economic contraction due to population decline.

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