Shared Equity Home Ownership
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What is the main topic discussed in this episode?
It's The Real Estate Podcast, brought to you by Ray White, the largest real estate and property group in Australasia. And welcome to another episode of The Real Estate Podcast, available on iHeartRadio, also on Google and Apple Podcasts or wherever you get your podcasts from. And let's have a look at the main centre forecast with propertybuyer.com.au for this Tuesday the 22nd of March. And in Sydney expecting a high today of 27 degrees, mostly fine. Melbourne expecting a shower or two with 23. Brisbane expecting a mainly fine day with 30 degrees. And in Perth today expecting a high of 28 with clear sunshine. Home ownership, as we know, is getting beyond the reach of a lot of Australian first home buyers.
What is the national shared equity scheme and why is it important?
There's no great secret in that statement. However, a national shared equity scheme would help level the playing field for first home buyers and also help slow down the decline in home ownership among poorer Australians of all ages. Well, to break this all down for us, we've invited back to the podcast Brendan Coates. You might remember Brendan. He is the Economic Policy Program Director at Grattan Institute. Good morning, Brendan.
How does the Grattan Institute maintain its independence in policy recommendations?
Welcome back to the Real Estate Podcast.
Thank you very much. It's good to be with you.
Yeah, great to have you back. A national shared equity scheme. Now, you wrote the paper, but tell our listeners, how does all of that work for you guys being completely autonomous to politics?
Grattan Institute is an independent public policy think tank.
What are the main challenges facing first home buyers in Australia?
Now, most think tanks will say they're independent, but we do take it more seriously than most because our funding isn't tied to either political party, to the government of the day, or really to particular interest groups. So Grattan's funded by an endowment. It was put together by the then federal government and the Victorian state government. That money is run by or managed by a board that's made up of people from both sides of politics. And it means that we are steadfastly independent because there's no consequences if we offend one side of politics or another. And we try to use data and we try to use evidence to sort of try to solve some of Australia's most pressing public policy problems, of which housing is, you know, one of the most urgent.
Yeah, I mean, it's so good that you don't have to appease any politician. I mean, that really, it just cuts to the chase so much quicker.
Yeah, look, it's very liberating and it does allow you to take, I suppose, have a more open mind about what the solutions are to a problem. In my experience, no one side of politics has a monopoly on what are good ideas. And so some of our policies will tend to be more politically palatable to the Labor Party. Some of our policies will be more politically palatable to the coalition. And the idea is to do what is going to work that would be in the best interest of the Australian people and try to communicate that forcefully. and then hopefully persuade whoever's in power at the time to take those up.
Yeah, yeah, that's so great. And under this paper that you propose, the National Housing Finance and Investment Corporation would co-purchase up to 30% of the home value. And I'll get you to talk a little bit about that with your paper, as well as the deposit of 5%.
How does the proposed shared equity scheme work for buyers?
Yeah, so home ownership is falling pretty sharply in Australia, particularly amongst younger, poorer Australians. It's also falling amongst older Australians on low incomes. So you've got these falling rates of home ownership and the drivers of that are the fact that young people struggle to put together a deposit unless they've got support from the bank of mum and dad. And older Australians aren't in the workforce for long enough if they've got some savings to pay off a mortgage. So that's where the idea of a shared equity scheme came from. And the proposal is basically that the federal government would be a partner in investing in a property. It would take up to a 30% equity stake, as you suggest.
And that means that it collects any capital gains on that 30% equity stake when the property is eventually sold or any capital losses.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:02–0:51
2
What is the national shared equity scheme and why is it important?
0:51–1:21
3
How does the Grattan Institute maintain its independence in policy recommendations?
1:21–1:42
4
What are the main challenges facing first home buyers in Australia?
1:42–3:31
5
How does the proposed shared equity scheme work for buyers?
3:31–4:37
6
What income thresholds are set for participants in the shared equity scheme?
4:37–5:48
7
How will the shared equity scheme be implemented and evaluated?
5:48–6:54
8
What are the advantages of a federal versus state-run shared equity scheme?
6:54–11:05
Speakers
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