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A key part of Anthony Albanese’s housing policy has come under fire after new research revealed just four per cent of homes in a major city would be eligible for it.
Analysis of the Government’s proposed Help to Buy Co-ownership scheme has shown that the most it would allow a single person to pay for a property is $655,000, ruling out the 96 cent of homes in Sydney that cost more than that.
“I was trying to think when was the last time I saw a house for sale for that price,” Home Loan Experts (HLE) CEO Alan Hemmings told the Daily Telegraph.
He said the plan would increase “demand, which will drive up prices even further” and would not solve the “overall problem” of housing supply.
Two out of every three apartments sold in Sydney last year cost more than $655,000, which would also exclude 66 per cent of that housing stock under Labour’s flagship plan.
Anthony Albanese’s housing policy has come under fire after new research revealed just four per cent of homes in a major city would be eligible for it. The Prime Minister appears in the photo.
Labor took the policy to the 2022 federal election, but it has not yet become law.
If passed in the Senate, where Labor needs the support of minor parties to pass laws, the government would pay 30 per cent of an established property or 40 per cent of a new build.
But a single person who wants to participate can’t earn more than $90,000 a year, and could only get a loan for $458,000 after account serviceability tests, in which lenders evaluate
A loan applicant’s ability to pay mortgages is 9.5 per cent, although rates currently sit around 6.5 per cent.
When the government’s 30 percent contribution is added, the total amount available for an established home is $655,000, according to HLE calculations.
Albanese defended his housing policy on Monday morning, telling ABC radio that the Government has “a whole set of programmes, this is just an additional one and what it effectively does is allow shared capital, shared ownership, so that people only need 2 percent. of a deposit”.
‘It makes it much easier to pay and in the future the person can buy out the government at a time that suits them if they choose.
‘It has worked effectively in Western Australia for over 50 years and has made a difference. It’s just a measure.’
The Prime Minister said the plan was unlikely to pass the Senate soon, as “the Greens and the Liberals are going to go against the comprehensive housing plan.”
“They can be held accountable for this: why they would vote against a plan that would help more people acquire their own home, about 10,000 a year,” he said.
Federal Housing Minister Julie Collins has also defended the scheme, saying: “Help to Buy has been designed to help those struggling to get into the housing market buy a home, without driving up property prices, which is why which is strictly directed to specific objectives”.
Pictured is a house in Sydney’s southwest that recently sold for less than $655,000 and would be eligible to buy under the Labor Party’s proposed scheme.
“Across the country, Help to Buy will be life-changing and put home ownership back within reach for thousands of Australians, particularly renters,” he said.
Sydney independent MP Allegra Spender criticized the lack of detail in the Help to Buy bill when it was debated in parliament last week.
He said research by the Parliamentary Budget Office showed $22 billion of taxpayers’ money would be needed.
“While I support the intent of the scheme, I am deeply uncomfortable providing any minister with this amount of public money with so little oversight and accountability,” Ms Spender said.