There’s a lot of discussion in Australia at the moment about housing affordability. The latest idea is that interest payments should be tax deductible for first-home buyers.
I don’t understand the constant focus on first-home buyers. A lot of other people struggle to buy housing as well.
We bought our first home at Port Pirie in 1993 for $45,000. We left Pirie for Eden a year later and sold the house to my parents for the same price. We simply couldn’t afford to maintain the mortgage payments, even short term, on an empty property while we established ourselves elsewhere.
We did make some money on buying and selling our two homes at Porepunkah, but relative to the cost of entry in other housing markets it was hardly a windfall.
For example, we sold our last home in Porepunkah for $282,000. It was a five-bedroom, three-bathroom house. There is nothing comparable in Kalgoorlie and you can’t buy a good 4×2 here for under $400,000.
One of the biggest barriers to home ownership is stamp duty. We are paying more than $8000 to the South Australian Government for a $245,000 property at Moonta Bay.
I also think long-term fixed interest rates are too high in Australia. In America the current 30-year fixed rate is 6.1 percent. In Australia, the longest term is usually 10 years and the interest rate is 7.9 percent.
I don’t know how to change the banks’ lending policies. State Governments though should be seriously leaned on by the Commonwealth to abolish stamp duty or cap it to something reasonable, say $2000 or under for single-dwelling residential properties.
