Recent journalistic articles claim the Sydney and Melbourne Housing markets ‘defy belief’ , and that government measures taken to rectify the situation could actually make things worse. Property prices continue to increase, with Sydney median houses being nine times the gross household income, and Melbourne properties being seven times the household income.
Part of the rising cost is believed to be due to the surging investor demand. There are plenty of investors willing to put money into a second or third property, but relatively few people who can buy the first home. More than half of the new housing mortgages are for investors.
Some of the proposed measures to address this situation include the creation of a housing finance corporation for low income earners, allowing them to only pay 70% of the mortgage cost. Another proposal is to allow first time buyers to use part of their superannuation.
Both of these proposed measure seem limited, even counterproductive. First time home buyers are unlikely to have much superannuation to draw on. And as Sydney has had an 18% increase in housing cost over the last year, with prices more than double what they were in 2009, so a mortgage cost reduce to 70% seems unlikely to help. This reduces rate only applied to low income situations anyhow.
Another proposal was flooding the market with more available housing. Hopefully the increase in availability would help reduce the cost of individual houses.
Sydney housing prices are increasing rapidly. But there are government measures designed to compensate for this. These measures could affect investments in the future. Talk to a conveyancing firm Sydney to reduce the financial risk.
Off the plan purchase Conveyancing firm Sydney
If the government take up the proposal to drastically increase the available housing there will be many property developments to invest in. But as these are designed to decrease the average cost of housing any investors must be wary. Talk to a conveyancing service to avoid any problems.