Want to Own Your Own Home? Be Careful

We know that housing availability is an issue on the Lower EP in particular, and affordability is starting to become a problem as people have no ability to spend on overseas travel.

But one new scheme has me rather concerned as a bait and switch.

You might have heard Mel Usher in the national news this morning talking about the federal government continuing to provide first home owner bank guarantees, which is a terrible thing for housing affordability as it simply creates an inflationary effect, forcing first home buyers into even bigger mortgages.

But there’s another scheme which has me even more worried.

Buyer beware? IMAGE: Canva

It’s called the OwnHome concept, and it basically means a prospective buyer moves into a home and rents it, with half the rent becoming equity and half going to the landlord.

In theory, it sounds wonderful and a great chance for renters to own.

In practice, this seems like a package left on the doorstep of people desperate to get into the market, and what’s that ticking sound?

What if a landlord has second thoughts?

Is there a cooling off period like there is on a purchase contract?

And if renters decide they don’t want to purchase at the pre-agreed price, within three to seven years?

They lose their equity.

But what if the renters lose income?

One or both of a couple lose their jobs?

It may be because I was raised by a tax office auditor and a tax agent (TAFE qualified accountant), with the tax agent being raised by a bank manager, but this smells off.

There’s a much better way to help those who can’t get off the rent treadmill and into the market.

Why not just treat rent payments as proof of a deposit?

If you rent for five years and pay, say, $65,000 in rent in that time (which is $250 a week, give or take a week) then why can’t the bank just use that as a stand in deposit, rather than holding the cash?

It might just be me, but that seems a better way for a bank AND a buyer to go about the business of determining if someone can afford a property.

With housing at a premium, all I can say is buyer beware.

Full disclosure, my landlord is great, but I wouldn’t want to have us pitted against one another if the worst came to pass.