Sam Elbanna, the principal of CPM Realty and a 20-year industry veteran, is forecasting thousands of apartments and homes purchased through the largess of the First Home Buyers Scheme (FHBS) will come back on the market over the next year.
Mr Elbanna blames the State and Federal Governments for creating a ‘mini boom’ last year with their FHBS of up to $24,000, enticing people who could barely afford the mortgage repayments then, when interest rates were low.
He says the Federal Government has inflamed the problem with its other stimulus measures, which has overheated the property market and forced the Reserve Bank to dampen down the economy by raising official interest rates.
“Many First Home Owners simply won’t be able to keep up with their mortgage repayments, which have risen five times over the past seven months, adding almost $3,000 per year to a $300,000 mortgage,” said Mr Elbanna.
“They want to remain owner-occupiers, but they never factored in the steady increase in interest rates since they exchanged contracts. They may have to sell up and either return to their family home, or go back to renting. The cycle will be repeated whenever any Government artificially interferes with the natural demand-supply dynamics of what should be a self-regulating, free-enterprise property market.”
Mr Elbanna labels the FHOS as a ‘cynical vote-buying exercise’.
“Both Labor Governments wanted to ingratiate themselves with young voters. While they achieved their short-term political aim, the longer-term result of their actions has been detrimental to housing affordability.
“The average young person in Sydney has been priced out of the market,” Mr Elbanna said.
« back to articles