The Victorian government’s new shared equity pilot scheme and vacant residential property tax are positive moves, but the bulk of the recently announced affordable housing measures won’t have a big impact, critics say.
Under the new $50 million pilot scheme HomesVic, 400 first home buyers will have the opportunity to co-purchase a home with the state government, which will take an equity share of up to 25 per cent in each property.
The program is designed to assist those who have the ability to meet regular mortgage repayments, but haven’t been able to save a large enough deposit due to rising rent.
Other announced housing affordability measures include:
- introducing a vacant residential property tax to address the number of properties being left empty across inner and middle suburbs of Melbourne
- abolishing stamp duty for first home buyers for properties costing less than $600,000
- providing a stamp duty concession (applied on a sliding scale) to first home buyers purchasing properties valued between $600,000 and $750,000
- doubling the first home owner grant in regional Victoria from $10,000 to $20,000 from 1 July 2017
- removing off-the-plan stamp duty concessions on investment properties
Affordable housing lobby group National Shelter executive officer Adrian Pisarski said such measures all helped, but formed part of a much larger puzzle.
“I think the package taken together is quite helpful,” he said. “[However] the stamp duty cuts by themselves will add inflationary pressure to the market.”
Mr Pisarski said he did not see a positive impact on mortgage stress in the short term.
“The level of foreign investment demand is increasing pressure on supply. Until proper tax reform is taken at the federal level – negative gearing and capital gain tax concessions – I don’t see an easing of pressure.”
He said we needed specific strategies at the low end of market to address the shortfall in supply…(continues)
SOURCE: Sandra Edmunds, “Victoria’s housing affordability salvo scores some hits and misses”, The Fifth Estate, 07 March 2017
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Produced by the librarians at the Brotherhood of St Laurence in Melbourne, Australia