Could this Home Loan idea work, would it save the current gen, and help the next gen. Thoughts, pros and cons.

[jade1898]

@hotinco Its a financial system based on Islamic law in arabic countries.

 

[quint]

@hotinco High house prices is indicative of high demand. Your solution needs to either disincentivise home ownership or create more affordable places to live. This does neither.

 

[resjudicata]

@hotinco 0.1% cash rate drives insane price rises over the last couple of years. OP suggests 0% mortgage rates to fix the problem…

 

[lisavega09]

@hotinco Others have essentially made the relevant points. I like that you’ve thought about this in detail, and before I’d begun my house buying journey I thought all the things the government had done were helping.

While buying I realised they really weren’t. It was apparent very quickly that the stamp duty waivers or grants provided for first home buying were almost immediately factored in by buyers and sellers. Within six weeks of the FHLDS being announced you couldn’t find a house in brisbane under the price cap listed.

It was obvious that all the government incentives did was raise prices. We ended up being lucky enough to afford to buy without using the FHLDS and stamp duty exemption/first home loan grants, but it did end being a fair bit more money than we’d intended to spend.

I subsequently agree with other commenters. We really just need to stop getting the government involved (this includes negative gearing). Pull out entirely and let the cards fall where they may. Hopefully for everyone’s sake things drop, or at least plateau. This growth is unsustainable, but until availability catches up to demand I don’t see it changing.

 

[serllpcb]

@hotinco Old enough to remember when we did have govt banks.

 

[prayerorprayer]

@hotinco New plan:

Government gives more incentives for low income & multi family housing developments to investors.

Teach young people how they can invest in those properties.

Housing prices will flat line in over demand suburbs but there will be more supply of affordable rentals.

 

[kalven_j]

@hotinco The idea doesn’t curb the demand which drives the prices up, and doesn’t solve the supply issue. Here is another idea (curbing the demand) - incremental tax on CGT for investment properties (eg +10% for 2nd investment, +20% for 3rd investment etc.). The amount of rent charged cannot exceed the expenses + mortgage + (some fixed earning rate) on investment properties.

 

[christian6969]

@hotinco Another idea to make houses more expensive, the government already has a whole bunch of schemes that do exactly this.

Build more houses or have fewer people, thats it, thats all that actually works.