Housing Minister Michael Sukkar tells Australians to chance the property market

Housing Minister Michael Sukkar advice for Australians to try their luck and sign up for a mortgage raised the eyebrows of market experts.

Housing Minister Michael Sukkar’s comments urging Australians to launch into the property market before the government’s first homebuyer scheme comes into effect and prices rise has been slammed by industry experts.

Mr Sukkar dished out the advice as the Coalition prepares to roll out its First Home Loan Deposit Scheme which will give those who qualify an opportunity to buy a home with as little as a 5 per cent deposit.

“If you’ve got an opportunity to get a foot in the market before then you should take it, given I think the market is starting to improve,” he told The Australian. “Peopl­e who buy now I don’t think will regret it at all.

“A re-elected (Scott) Morrison government has put a lot more confid­ence into the market. We’re seeing green shoots in Melbourne and Sydney in the last quarter and I think with low interest rates, with APRA reducing service­ability buffers, all those factors combine to confirm that optimism.”

Under the scheme, eligible first home buyers would only need a 5 per cent deposit, rather than the usual 20 per cent, with the government guaranteeing the rest and covering the mortgage insurance under a special loan.

Under the Coalition’s plan, borrowers would still need to go through the usual checks and balances when applying for a home loan, and will eventually repay their loan as usual.

The scheme is tipped to be available from January 1.

CoreLogic research analyst Cameron Kusher said he disagreed with the minister’s sentiment and questioned the appropriateness of the guidance.

“It’s certainly unusual given that it isn’t a comment about housing policy and seems to be treading closer to investment advice,” he told news.com.au.

“Remember that the national figures are largely driven by Sydney and Melbourne and the signs of housing market improvement are very recent.

“Furthermore, outside of Sydney and Melbourne values are still declining so first home buyers that were to purchase would be seeing the value of their home reducing.”

Responses to the comments were equally scathing on social media.

Chief economist at IFM Investors Alex Joiner tweeted: “The spruikers are out in force in this article, neither government officials nor real estate economist (or any other type) commentary should be mistaken for financial advice for individuals.”

The spuikers are out in force in this article, neither government officials nor real estate economist (or any other type) commentary should be mistaken for financial advice for individuals...

— Alex Joiner (@IFM_Economist) July 17, 2019

Mr Kusher also cast doubt the first home buyers scheme will have any material effect on house prices.

“People accessing the First Home Loan Deposit Scheme still have to qualify for a mortgage with a lender, it’s just they can do so without having to pay lenders mortgage insurance,” he said.

“I am sure the policy will be appealing but I don’t think it will necessarily drive prices higher.

“Ultimately this scheme doesn’t really address the crux of the issue which is housing affordability is a big challenge especially for lower income households.”

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