Anthony Albanese’s Help to Buy shared equity scheme limited to 4pc of Sydney houses
Prime Minister Anthony Albanese has defended his government’s Help to Buy scheme, despite analysis showing only four per cent of Sydney homes are eligible to purchase under it. Find out why.
NSW
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A Sydneysider cannot purchase 96 per cent of houses using the Prime Minister’s signature home affordability proposal.
New analysis of federal Labor’s Help to Buy co-ownership scheme reveals the most it allows a single person to pay for a property is $655,000.
But just four per cent of house purchases in Sydney over the past year have been at or under that amount, according to PropTrack.
“Based on recent sales, very few homes are available for sale in Sydney below $655,000 – particularly houses,” said PropTrack senior economist Paul Ryan.
There are only four houses on the market in all of southwestern Sydney for $655,000 or less.
During the past year, sales in the area have included these two properties (below) in Airds.
The news is better when it comes to apartments, but not great.
A third of Sydney unit sales in the last 12 months have been at or under $655,000.
“Many first-home buyers in Sydney will be looking for apartments given the income limits on the proposed Help to Buy scheme,” Mr Ryan said.
As proposed by Anthony Albanese before the last election, the scheme involves the government paying for 30 per cent of an established property or 40 per cent of a new build. But to be eligible, a single person cannot earn more than $90,000 a year.
When the shared ownership scheme was announced in May 2022, interest rates were still at historic lows of less than 2.5 per cent.
At the time, lenders were testing whether applicants for any property purchase could afford to repay if rates rose to 5.5 per cent.
Home loan rates are now at about 6.5 per cent, and lenders are applying serviceability tests on 9.5 per cent.
That has crunched the amount most people are able to borrow.
A person on $90,000 a year is now only able to get a loan of $458,000.
Add on the government’s 30 per cent contribution and the total amount in the kitty for an established dwelling is $655,000, according to calculations by Home Loan Experts for The Daily Telegraph.
Home Loan Experts CEO Alan Hemmings, who lives in Western Sydney, said: “I was trying to think when was the last time I saw a house for sale for that price.”
Mr Hemmings said Help to Buy would add to “demand which is going to put up prices even more.”
It was not fixing the “overarching issue”, which was supply, he said.
Mr Albanese defended the signature home affordability proposal on Monday morning.
“We have a whole suite of programs, this is just an additional one and what it does effectively is allow for shared equity, shared ownership so that people only need 2 percent of a deposit,” Mr Albanese told ABC NewsRadio.
“It makes it a lot easier to pay off and down the track the person can then buy out the government’s share at a time of their convenience if they choose to do so.
“It worked effectively in Western Australia for more than 50 years and has made a difference. It’s just one measure.”
When asked where the proposal for the scheme currently stood, the Prime Minister said “the Greens and Libs are going to go against the comprehensive housing plan”.
“They can be held to account for it (and) why they would vote against a scheme that would help more people into home ownership, some 10,000 a year,” he said.
Federal Labor said there were thousands of established properties listed online for sale within the Sydney region for less than $655,000.
“Help to Buy has been designed to help those struggling to enter the housing market buy a home, without driving up property prices which is why it is tightly targeted,” Housing Minister Julie Collins said.
“Help to Buy is one part of the Albanese Labor Government’s broad and ambitious housing reform agenda which is helping more Australians into home ownership.”
Opposition Housing spokesman Michael Sukkar said: “Schemes like this that already exist throughout the country have been rejected by Australians.”
Last week The Telegraph revealed the NSW Home Buyer Helper shared ownership scheme filled just 172 of 3000 places in 2022-23.
The Help to Buy legislation was debated in Canberra this week, during which Sydney teal Allegra Spender criticised the lack of detail in the bill.
She said Parliamentary Budget Office research showed the proposal would involve taxpayer contributions of $22 billion.
“While I support the intent of the scheme, I am deeply uncomfortable providing any minister with this amount of public money with so little in the way of oversight and accountability,” Ms Spender said.
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