Two annoying rules are preventing young Aussies from gaining a foothold on the property ladder, according to financial guru Mark Bouris.
The founder of Wizard Home Loans has identified two ‘unfair’ rules preventing young people from buying their first home.
The first relates to the First Home Owner Grant (FHOG), a scheme that offers $10,000 to eligible people purchasing their first home valued at $600,000 or less.
“Did you know that the First Home Owner Grant only applies to apartments with a floor area larger than 50 square meters?” Bouris wrote in an article for Yahoo Finance.
‘Young people who want to buy a one-bedroom apartment or studio are therefore not eligible for the FHOG.’
Wizard Home Loans founder Mark Bouris has identified two ‘unfair’ rules preventing young people from buying their first home
Mr Bouris noted that the First Home Owner Grant (FHOG), a scheme offering $10,000 to eligible people purchasing their first home valued at $6,000,000 or less, only applies to apartments with a floor area of more than 50 square meters.
The businessman also pointed out that it is much more difficult to get a loan for a property smaller than 50 square meters.
“Why would someone who wants to buy a country house have a better chance of getting a loan than someone who wants to buy a studio apartment?” he asked.
‘It’s not fair.’
Bouris then targeted the “absurdity” of charging people $300 to review a property’s strata report to check for any defects or nasty surprises.
“It’s like when you go to buy a car and the car dealer charges you $300 just to see the car’s maintenance history. You would tell the dealer he is dreaming,” Bouris wrote.
The founder of Yellow Brick Road mortgage brokers pointed out that if you were to look at 20 different apartments and rate them correctly, it would cost you $6,000 just to access their strata reports.
“This is the absurdity of the real estate market in this country. That’s why so many young people give up,” he wrote.
‘And that’s why we need change. So let’s stop charging first home buyers to see a strata report. Let’s allow the First Home Owners Grant to apply to homes with a floor area of less than 50 square meters.
Mark Bouris (pictured) also targeted the ‘absurdity’ of charging people $300 to view a property’s strata report to check there are no defects or nasty surprises in the building.
‘It’s common sense. It can be done with the stroke of a pen.’
It comes at a time when Australian house prices are expected to hit record highs as a combined mix of population growth, building blocks and lending power heats up the market.
Perth, Adelaide, Sydney and Brisbane are expected to lead house prices in the 2025 financial year, setting new records alongside Queensland’s Sunshine Coast and Gold Coast, according to property portal Domain.
By the end of the 2025 financial year, average house prices would top $850,000 in Perth and $1.7 million in Sydney, reaching $984,000 in Adelaide and $999,000 in Brisbane, the property market predicts.
Record average house prices are also planned for regional Australia.
Nicola Powell, head of domain research and economics, said population growth, construction issues and borrowing power would be responsible for the expected price growth in the Australian market.
“We have seen an increase in the number of single-person households and a decrease in household size overall, which has increased demand for housing, exacerbated by migration,” Dr Powell said.
‘Housing construction is also struggling to keep up with population growth due to the scarcity of land, weak building permits and high construction costs, exacerbating the existing structural deficit.’
Stage three tax cuts on July 1 would mean more money hitting Australian households, increasing borrowing capacity across the country, Dr Powell said.
For some, that would mean increasing their budgets, while for others it could mean more borrowing capacity and a push into the market, she said.
“All three factors will play a role in further pushing up house prices in Australia,” added Dr. Powell added.