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While welcoming the new election promises for first home buyers, the FBAA and MFAA have both called for more to be done.
After the Labor Party and Coalition both unveiled new housing measures to increase first home buyer ownership over the weekend, the two broker associations have voiced general support of the measures but suggested more could be done.
Speaking to The Adviser following the announcements, the managing director of the Finance Brokers Association of Australia (FBAA), Peter White, AM commended both parties for working to remove unnecessary barriers for people to enter the housing market, but adding: “While these announcements should positively impact first home buyers, we must also recognise that they do not directly help the much larger percentage of people who are existing mortgage holders.
“It is important that policies don’t just help new borrowers enter the market, but existing borrowers to stay in the market and retain their homes.
“We’d like to see practical assistance for existing borrowers, so they can more easily refinance and access lower interest rates. The FBAA has consistently called for a reduction in the buffer rate, which we note is now an election commitment of the Opposition, as this will assist all borrowers," he continued.
“If existing borrowers end up leaving the market due to cost of living pressures and an unrealistic serviceability assessment rate, they will put pressure on the rental market from the back-end, possibly negating the new home buyers on the front-end.”
The FBAA MD also warned that while the Albanese Government would remove caps on its First Home Guarantee Scheme, lenders may not be able to adequately securitise their mortgage portfolio with a large proportion of these loans.
“This need may result in lenders capping the number of this type of loan they are willing or able to provide,” White said.
White also echoed concerns from some economists that demand-side initiatives may increase house prices, which could “have the effect of cancelling out some of the benefits for first home buyers, due to them needing a greater deposit and being unable to meet credit criteria”.
“All sides of politics must consider the long-term impacts and create policies that bring long-term benefits, not just focus on the short-term” he said.
MFAA calls for tax reform
The CEO of the Mortgage & Finance Association of Australia, Anja Pannek, also applauded the major parties for “clearly recognising housing affordability and access to home ownership as key issues for voters – particularly first home buyers – in this election”.
She said that Labor's removal of income caps for the guarantee scheme could “significantly broaden access, reflecting the reality that many first home buyers today earn above traditional eligibility thresholds but still struggle to buy”.
“Increasing property price caps responds to rising home values, particularly in capital cities, and better aligns the scheme with actual market conditions,” Pannek said of the Coalition's proposal.
However, she added that any changes should be accompanied by supply-side activity to “avoid fuelling further price growth.”
Indeed, she said that more detail was needed on Labor’s commitment to build 100,000 new homes for first home buyers “particularly where and how fast these homes will come online, and how affordability will be maintained”.
Pannek said: “While buyer-side incentives are useful, they must be paired with policies that accelerate housing construction and release of appropriate land.”
“Implementation and speed matter. Whether homes are built, deposits reduced, or tax deductions granted, the real test will be how quickly these policies deliver practical outcomes.”
Commenting on the Coalition’s mortgage deductibility scheme, the MFAA CEO said that while it “could help with cash flow in the critical early years of a loan”.
However, Pannek said she was “disappointed not to see broader tax reform on the table” by either party.
The MFAA suggested the body would have liked to see the federal government with the states to review stamp duty, “which we know not only increases property acquisition costs but places a barrier to efficient property market activity,” she said.
Other measures the MFAA has previously called for to improve home ownership include moving to 'dynamic' serviceability buffers and adjusting or waiving HECS debt for first home buyers.
[Related: Major parties unveil new promises for home buyers]
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