A Shepparton real estate agent has welcomed a federal election promise about changes to home loans, but said the scheme must be monitored correctly.
Stockdale and Leggo director Scott Butler said the scheme, firstly a Coalition promise then quickly matched by Labor, would be a positive step to reignite city capital with the country market flowing on six months after that.
The election promise would have first home buyers receive Federal Government support with their 20 per cent house deposit regardless of who wins the federal election on Saturday.
Prime Minister Scott Morrison announced the new scheme at the Liberal election campaign launch in Melbourne on Sunday, outlining the fact first home buyers would only need to save for a five per cent deposit.
Shadow treasurer Chris Bowen said Labor would match this commitment.
While Mr Butler welcomed the initiative, he said it would be wise to include financial guidance to first home buyers within the scheme and suggested this would be a good regulation to include within the legislation.
‘‘It will certainly stimulate the first home buyer market which, in turn, will stimulate other markets,’’ he said.
Under the plan, the National Housing Finance and Investment Corporation — which Mr Morrison established when he was treasurer — would guarantee the difference between five per cent of a house’s purchase price and the 20 per cent deposit.
Shepparton real estate agent Ken McNamara was eager to learn more information about the entire scheme before passing judgement on its effect on the region’s housing market.
‘‘I’d like to see more details about it and then we’d know how it’s going to affect everything,’’ he said.
The prime minister said the plan would allow singles earning less than $125000 a year and couples earning less than $200000 a year to get into the housing market for the first time.
‘‘The support would stay in place for the life of the loan,’’ Mr Morrison said at the announcement.
The scheme would give preference to smaller banks and the non-bank lenders, who would still do the normal checks on the borrowers to make sure they could meet their repayments.
‘‘This isn’t free money,’’ Mr Morrison said.
However, Mr Butler highlighted the fact Labor’s decision to reform negative gearing could have a detrimental effect on the market, if elected.
He said the current market was propped up by private investor money and without the incentive for these investors to remain, there could be a downward turn on the market.
‘‘If they pull out because there’s no incentive, then (the market) needs to be propped up by government housing,’’ he said.
‘‘Therefore, you’ve got this yin and yang thing happening.’’
The home loan scheme, which would start next year, would run alongside the government’s first home supersaver scheme and other state-based initiatives.
— with AAP