How Rose purchased a home independently,
Rose Bishop lived in share houses for nearly two decades, until she found herself in a rental with black mould.
The mould made her realise how much she craved the security of owning a home, which seemed impossible.
As a 39-year-old public servant, she had grown up in a regional town and couldn’t rely on her parents.
They couldn’t help her with a deposit, so the dream of homeownership always felt out of reach.
The mould made her sick, and her landlord ignored her repeated pleas for help, leading to her frustration.
Finally, she decided that enough was enough and needed to take control of her future financial security.
“It made me realise that the best place to start for financial security would be a home that I own,” she explained.
With help from a shared-equity program, similar to the new federal government scheme, she managed to buy a home.
This scheme, which passed through parliament this week, allows her to purchase a one-bedroom apartment in mid-2022.
The new law will assist 10,000 households annually, co-buying homes with the government, although experts warn it won’t solve everything.
The shared-equity scheme has faced several hurdles, as Labor proposed helping low and middle-income households with small deposits.
Labor’s plan was to buy 30 percent of the property, or 40 percent for new homes, to aid buyers.
The Greens initially called for rent caps and higher social housing spending, but they dropped their demands this week.
Meanwhile, the Coalition’s policy is to allow first-home buyers to access their superannuation for a property purchase.
Housing experts warn that affordability is now so stretched that multiple measures at different government levels are necessary.
One measure that various state governments have implemented is shared equity, aimed at helping individuals purchase homes.
Bishop used the Victorian Labor government’s Homebuyer Fund to buy her unit in the inner Melbourne suburb of Travancore.
She had managed to scrape together a modest deposit, just enough for an investor-grade apartment in the CBD.
While searching for options, she discovered the state scheme, which helps individuals earning $135,155 or less to buy a home.
The program allows homebuyers to purchase properties worth up to $950,000, offering an opportunity for those with smaller deposits.
Receive the latest property news and advice directly in your inbox
The scheme meant she had 25 percent of the purchase price covered, significantly boosting her budget for the home.
“It just took my buying power up to something nice, something liveable,” she explained, referring to her new apartment.
She paid $320,000 for an apartment in a 1970s block that she couldn’t have afforded to rent previously.
“I am very passionate about helping those from low-income backgrounds or without financial support to achieve housing dignity,” she said.
Housing expert Brendan Coates supports the federal shared equity scheme, seeing it as a key step toward solving the issue.
Coates believes it will help people without family support, especially those who are older or divorced, enter homeownership.
“It’s obviously not a silver bullet, but it’s another step toward solving the problem,” he stated.
However, Coates stressed that many more steps are needed to fully address the housing crisis in Australia.
He would also like to see more homes built to accommodate a growing and wealthier population demanding more space.
Commonwealth Rent Assistance needs to increase, and more social housing must be built, Coates emphasized in his comments.
“In a world where people are desperate and feel governments aren’t delivering, they may be tempted by ineffective solutions,” he explained.
For instance, he said a rent freeze could make it harder for tenants to find new rental properties.
He suggested that rent increase limits, like those in the ACT, could be expanded to other areas, but with challenges.
This would require investment in data collection to effectively track rent inflation, he added.
Coates hopes that the political conversation is shifting as the share of Millennials and Generation Z voters continues to rise.
Independent economist Saul Eslake also advocates for increased housing supply, including social and affordable housing, along with planning reforms.
Eslake supports the shared equity scheme, believing it will benefit those able to access it, though with limitations.
He warned that the rising demand for housing could push prices higher, but the scheme’s limited size reduces its impact.
Eslake suggests abolishing first homeowner grants and mortgage guarantee schemes while replacing stamp duty with a broad-based land tax.
He also proposed restricting negative gearing to new housing and reducing the capital gains tax discount to make a difference.
However, Eslake points out that around 11 million Australians own homes, and only about 100,000 buy their first home annually.
This reality discourages politicians from pursuing policies that limit house price growth, he noted.
“The only factor that might change this trend is the growing concern among my generation about our children’s homeownership prospects,” he said.
Alternatively, he believes that some may be motivated by a more self-interested desire to get adult children out of the house.
