Research from the National Centre for Economic and Social Modelling has found that about 1 million low-to middle-income earners spend more than 30 per cent of the income on housing. This indicates that housing affordability has indeed deteriorated and become more widespread in Australia. But with high interest rates at 12% per year and banks increasing interest rates higher than the RBA’s recommendation, Australia's housing affordability crisis looks to worsen.
In an attempt to combat this escalating problem, the Government has gone beyond its initial federal election promise of establishing First Home Saver Accounts by declaring that people who buy property together under a co-ownership framework will be able to aggregate their First Home Saver loan accounts to substantially increase the windfall for purchasing a home jointly.
Buying a home with others enables the costs of purchasing a home such as the purchase price, legal fees and stamp duty to be split amongst co-owners thereby making it easier and affordable to enter the property market. With treasury signalling its permission to join First Home Saver accounts together, the first home buyers may have a weapon in their arsenal to combat housing affordability issues.
Jeremy Levitt from POD Property , a co-ownership specialist, has welcomed this initiative, saying that this co-ownership is a viable model in tackling the mounting housing affordability problem and has also been acknowledged by the Federal Government.