First-home buyer support labelled 'a bandaid solution' to housing crisis
A new poll published by the Finance Brokers Association of Australia (FBAA) has highlighted a widening difference of opinion among mortgage brokers over Labor’s impact on the broking industry.
According to the FBAA’s latest bi-monthly pulse check on broker sentiment, 33% of brokers expect a positive impact on the industry from Prime Minister Anthony Albanese’s party, while 38% expect a negative impact. The remaining 29% were neutral.
Older brokers tend to be more pessimistic over the government’s policies, with 47% of brokers aged over 50 having a negative view of the government’s impact on the broking industry.
One broker, aged 48, told the FBAA: “Tinkering with things like tax ‘brackets’, assessment rate margin, government deposit support, etc., is a bandaid solution. It only masks the real problem of housing shortage.”
Indeed, "lack of affordable housing stock" was cited as the biggest barrier to home ownership, followed by "saving for a deposit" then "serviceability hurdles due to interest rates/income".
Another broker, aged 66, said Labor’s promises to build more homes “needs to be reviewed as the conversations at present are all about how their targets are unachievable”.
Labor has pledged to build 1.2 million new homes by 2029, but has so far struggled to hit requisite build rates.
The government has also implemented a number of generous first-home buyer (FHB) incentives, such as the First Home Guarantee, which allows FHBs to buy a home with just a 5% deposit with costly Lenders Mortgage Insurance (LMI).
But “they are just pushing prices higher with their incentives”, said one broker. “Every first home buyer always pushes to the absolute max. Even if it means going above their 30% gross pay, which essentially means they are in mortgage stress from day 1.”
Business is booming
Nonetheless, polled brokers were broadly united in one opinion – Labor’s first-home policy is good for business.
Somewhat contradictorily, A total of 74% of mortgage brokers expect more demand for mortgage services because of Labor’s pledges to help FHBs.
The vast majority of brokers (72%) also expect refinancing to increase over the next six months, with younger and newer brokers the most optimistic.
FBAA managing director Peter White (pictured) implored brokers to get a firm grip on Labor’s FHB policies, whether they agree with them or not.
“With this expanded access, brokers must be well-versed in the new 5 per cent deposit rules and other government schemes to support buyers entering the property market,” said White.
