PM Scott Morrison says ‘it was hard’ to buy his first house
Scott Morrison has tried to relate to young Aussies struggling to buy their first home, saying it was also hard for him and Jenny in 1995.
As property prices soar and young Australians continue to struggle to buy their first home, Prime Minister Scott Morrison has tried to relate saying it was also hard for him and his wife Jenny.
Speaking about the expansion of the government’s first home buyers’ scheme that cuts the deposit required to buy a home to five per cent, Mr Morrison has drawn comparisons to his own experience buying a home almost 30 years ago.
“The hardest thing to do when you’re buying your first home, I remember this when Jenny and I were buying our first time, it was, it was hard back then, I believe it’s harder now, was the deposit you need to pull together, and that was a 20 per cent deposit (back then),” he said at a press conference on Monday, adding the 5 per cent deposit would “massively cut down” what people now had to save.
Anyone not eligible for the scheme will likely still be expected to put down a 20 per cent deposit for a home, with Lenders Mortgage Insurance payable for anything below.
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Morrison’s sentiment on Monday matches what he has previously said when talking about the scheme. When announcing new spots on the scheme in December, he said it had “always (been) hard to buy your first home and it is even harder now”.
The Morrisons’ first home in 1992 in Sydney was a company-title small apartment in a 1960s-era block on Pacific Street, according the Australian Financial Review.
In 1995, the Morrisons bought a two-bedroom Californian bungalow on Bronte’s Lugar Brae Ave in their own names for $330,000. Mr Morrison was 27 years old.
He had worked for six years as a national policy and research manager for the Property Council of Australia until 1995, when he moved to the Australian Tourism Task Force as deputy chief executive.
The Morrisons sold the Bronte property in 2009 for $985,000 when they bought in the Sutherland Shire. The property was again sold for $1.4 million in 2014 and realestate.com.au now estimates it to be worth about $2.9 million.
The Morrisons now own one home in the Sutherland, but still have a mortgage.
Under the New Home Guarantee Scheme, eligible first home buyers can purchase a home with a deposit of five per cent, or two per cent if they are a single parent, with the federal government guaranteeing the remaining 15 per cent so buyers avoid paying mortgage insurance, which is usually needed for a deposit under 20 per cent.
The scheme can only be used on homes worth up to a certain amount, which varies by area. In Melbourne the price cap is $700,000, while in Sydney it is $800,000.
It is open for singles earning up to $125,000 and couples earning up to a combined $200,000.
The question that prompted Mr Morrison to share his first home buying experience on Monday was a reporter asking where a first homebuyer could purchase a home for $750,000 in Sydney.
He did not answer the question but instead explained how helpful the scheme was, explaining that it had “helped people beat the rising housing market and get themselves into a first home”.
He was also asked if the scheme, which Mr Morrison said was developed before the last election in 2019, should have been readjusted for the rising cost of the housing market.
Mr Morrison responded: “Well, let me point out the program to you again, 20 per cent down to five per cent. And if the prices are rising, it’s five per cent or 20 per cent of the increased price. So the ability to cut that down by 15 per cent makes all the difference.”
There have been only two other periods in the past 140 years when house prices in Australia have risen more sharply than in 2021.
In capital cities, dwelling values surged by more than 20 per cent and it was even higher in regions, where prices jumped by 25 per cent.
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