According to finance guru Mark Bouris, two infuriating rules are preventing young Australians from getting a foothold on the property ladder.
The founder of Wizard Home Loans has identified two “unfair” rules that prevent young people from buying their first home.
The first relates to the First Home Owner Grant (FHOG), a scheme that offers $10,000 to eligible people purchasing their first property valued at $600,000 or less.
“Did you know that the first-time homeowner grant only applies to apartments larger than 50 square meters?” Bouris wrote in an article for Yahoo Finance.
“Therefore, young people who want to buy a one-bedroom apartment or a studio will not be able to benefit from the FHOG.”
Wizard Home Loans founder Mark Bouris has identified two “unfair” rules preventing young people from buying their first home.
Bouris noted that the First Home Owner Grant (FHOG), a scheme that offers $10,000 to eligible people purchasing their first property valued at $6,000,000 or less, only applies to apartments with a floor area greater than 50 meters. squares.
The businessman also pointed out that it is much more difficult to get a loan for a property of less than 50 square meters.
“Why should someone who wants to buy a mansion have a better chance of getting a loan than someone who wants to buy a studio?” he asked.
‘It’s not fair.’
Bouris then took aim at the “absurdity” of charging people $300 to view a property’s strata report to check for defects or unpleasant surprises.
‘It’s like going to buy a car and the dealer charges you $300 just to see the car’s service history. You would tell the merchant that he is dreaming,” Bouris wrote.
The founder of Yellow Brick Road Mortgage Brokers said if he could view and properly value 20 different apartments, it would cost him $6,000 just to access their strata reports.
‘This is the absurdity of the real estate market in this country. That’s why so many young people are giving up,” she wrote.
‘And that’s why we need a change. So let’s stop charging first home buyers to view a strata report. Let us allow the First Home Owners Grant to apply to properties with a floor area of less than 50 square metres.
Mark Bouris (pictured) also took aim at the “absurdity” of charging people $300 to view a property’s strata report to check that there are no defects or unpleasant surprises in the building.
‘It’s common sense. It can be done with a simple movement of a pen.’
It comes at a time when Australian house prices are set to reach record levels as a combined combination of population growth, construction blockages and borrowing power heats up the market.
Perth, Adelaide, Sydney and Brisbane are expected to lead the house price pack in fiscal 2025, setting new records alongside Queensland’s Sunshine Coast and Gold Coast, property portal Domain says.
By the end of the 2025 financial year, median house prices would exceed $850,000 in Perth and $1.7 million in Sydney, and reach $984,000 in Adelaide and $999,000 in Brisbane, the property market predicts.
Record average house prices are also forecast for regional Australia.
Head of domain research and economics Nicola Powell said population growth, construction challenges and borrowing power would be to blame for expected price growth in the Australian market.
“We have seen an increase in single-person households and a decrease in household size overall, which amplifies the demand for housing, further exacerbated by migration,” Dr Powell said.
“Housing construction has also struggled to keep up with population growth due to land shortages, weak building approvals and high construction costs, exacerbating existing structural supply shortages.”
The stage three tax cuts on July 1 would mean more money flowing into Australian households, raising borrowing capacity across the country, Dr Powell said.
For some, that would mean increasing their budgets, while for others, it could mean more borrowing capacity and a push into the market, he said.
“All three factors will play a role in driving up house prices in Australia,” Dr Powell added.
