We could point fingers at international money, investor exuberance, housing shortfalls etc for Australia's property prices ... but I think the govt has to take some of the flack here.
Firstly the first home buyers grant.
And now the NSW shared equity scheme.(and other similar across other states)
How does Shared Equity make it easier?
With Shared Equity, the NSW Government lightens the load of a mortgage by contributing up to 40% of the purchase price of a new home and up to 30% towards an existing house. In exchange, the Government holds an equity share in the property – but the home is yours. (Value of home purchased up to $950k in Syd metro)
Are there other advantages?
Yes. As well as allowing participants to pay a deposit of just 2%, Shared Equity means lower repayments on a smaller loan amount, and no need for expensive lender insurance. You won’t pay interest or rent on the Government’s equity share, either.
Who's eligible to apply?
- singles aged 50 and over
- single parents of a dependent child
- first home buyer key workers employed as:
- police officers
- paramedics, registered nurses and midwives
- teachers and early childhood educators.
Single applicants must earn less than $93,200 and joint applicants must have a combined income of less than $124,200.
So I think the CBA home deposit scheme could be a direct result to compete with the two banks who have been given the task of vetting/issuing these subsidised mortgages. Bendigo and Unity banks.
Another classic on news.com.au how easy it is to make money in property @Strawman
My favourite quote is "More impressively, plumbers Jack Gray, 23, and Harry Gray, 22, both from South Wentworthville in Sydney, have done so without help from the Bank of Mum and Dad, although they do still live at home where they pay $100 a week in board."
They never mention what the net asset value is in these articles.
Anyway, property to the moon ???? thank god for the investment law of doubling every 7 years.
.i have investments in industrial, residential property and also shares. Each investment class is a little different.
Property investment returns have been strong due to low interest rates , strong capital gains and leverage. The cash returns have generally been poor as a percentage of the property value. Capital gains have created the value The economics have now inversed with high interest rates and negative capital growth
Shares are a big investment class. Each business behind individual listed shares is different. It’s hard to compare shares as a class against property as a class.
Maybe the only way to answer this question at a high level is to compare a property ETF against a large index tracking equity ETF over a long period of time.
The average return on capital for equities should be higher than for property.