Federal intervention

[rambada]

Just heard a snippet on the ABC radio regarding a Federal Govt medling type review for housing. I missed the whole story but the drift of it was that there is an advisory committee (Loaded for a predetermined outcome) due to hand down an outcome in March. It involves the financial institiute having a share of the house, ie a 50/50 arrangement with the bank and purchaser. The purchaser has the benifit of cheap housing, able to renovate etc, and sell when they want ie ownership.
Does anyone have the full goss on this and what are peoples opinions of its outcomes. I've tryed a search for more info but have come up zippo.
My first impression is it would increase demand and thus prices -more property boom? It would initially diminish the rental market as more people buy than rent, then level out? Almost 1st home buyer scheme like.
Howard is driving this 'review' hence the predetermined outcome and it has been loaded with economists who support the concept.

 

[Aceyducey]

rambada,

This sounds a little like some of the public housing initiatives taking place in some states where low income earners will be able to take out a mortgage on part of the home they live in and thereby at least get some equity over time while the financial institution or government owns the remaining % of the property.

Which ABC radio channel did you hear it on? They'll probably have a transcript and links on the website.

Cheers,

Aceyducey

 

[see_change]

There was a scheme floated a couple of months ago , where a financial institution could own a percentage of a dwelling . They would then get their money back when ( if ) you sell it.

John Howard said the idea had merit and it was to be investigated.

All I could see it doing would be to further boost house prices further as, human nature being what it is , people would still spend as much they could (not ) afford to pay for a house , and with the extra equity coming in from banks , people would be able to pay more for a nicer house. As more people could afford to pay more , guess what , we'd have the "mother of all booms ".

The only way to stop that would be to put in tighter borrowing restrictions on peoples borrowing capacity , but that would interfer with our god given right to stuff up our own finances.

The aim , from John Howards percpective as I recall it, was to free up peoples equity in their own house so they would invest their money in other areas ( eg safe areas like the stockmarket ) increasing money avaible to businesses for investment.

see change