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Transcript of - Albo's 40% off Election Promise
Albo’s dropped the worst housing policy bombshell last week!
Anthony Albanese, leader of the Labour Party has promised to help first homebuyers by promising to co buy houses and contribute up to 40% of the purchase price. It doesn’t sound good, does it? Here are my thoughts.
What is Albo's scheme?
But before I do that, let me explain what the actual deal is, the government will be able to contribute up to 40% of the purchase price. This scheme is limited for the first 10,000, income is limited to $90,000 for singles and $120,000 for couples, only 2% needed to save as a deposit.
Why will this scheme be bad for the economy?
The very first thing that screams out of me is that governments don’t know how to cost things and projects inevitably blow out. Take the First Home Loan Deposit Scheme, for example. This was introduced in 2020. To get people into their own homes by having the federal government guarantee the loans. It was meant to be limited to 10,000. But since then, the scheme has provided well over 30,000 spots, and morphed into all these other new schemes like the New Home Guarantee and The Family Guarantee. So you can’t tell me that if they bring in this, it’s just going to be limited to 10,000 spots. The income caps are low, which is probably appropriate for what they’re selling. Again, these are subject to change in the future.
Could you imagine a federal government funding 50% of a $1.5 million property? This is not that far away from what’s being proposed. I also look at this and I think people who don’t have any skin in the game are generally the ones most at risk. They don’t have to struggle to get this opportunity because they only need to save a 2% deposit. If they only have enough a 2% deposit. What happens when the interest rates go up 2%?
This is going to help feed the continuation of the next property boom. If it gets through and let’s be honest, Ol’ mate Scott is looking pretty shaky at the moment. If it gets through, you can almost be guaranteed that it’ll be beefed up over time.