Housing affordability is one of Australia’s biggest problems at the moment, with prices rising at a rate faster than those of rents and household income. However, the government is doing little to address this issue, so real estate group Starr Partners chief executive Douglas Driscoll offers his own solutions to solve the housing affordability crisis.
One of his solutions is to offer discounted mortgage rates for first home buyers.
“Subsidies already exist for students, with the availability of extremely competitive low interest rate loans and study assist loans, so why can’t something similar be offered to first home buyers?” Driscoll asked. “Home ownership is not a democratic right, but it is certainly something that a government should help encourage and financially facilitate.”
Driscoll also suggested limiting negative gearing, as the working class cannot always benefit from it. Though the two main political parties are on the opposite sides of this issue, he believes that the solution lies somewhere in between.
“Rather than abolish negative gearing altogether, it could perhaps be less generous or capped to a certain number of properties,” he said. “This would only apply to new transactions with any existing investments being grandfathered.”
Driscoll also claims that first home buyers should be exempted from paying “the exorbitant cost of stamp duty,” and should be allowed to purchase using their superannuation. “It should be structured as an interest-free loan, with repayments being made over a long-term period with the full amount needing to be settled before the maturation of the fund,” he said.
Significant investment in regional towns can also make rural areas more attractive to buyers and prevent them from migrating to metropolitan areas with soaring house prices. Driscoll also believes that shared ownership—a practice in the UK—will also work well in Australia.
It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan