NEIL BREEN:
Housing’s gone gangbusters in Australia since the pandemic hit. One of the biggest buyers in the market have been new home owners which is good. New data out today shows more than 300,000 new home owners have entered the market since the start of COVID. According to data released by the Federal Government, more than 112,000 grants were approved for new homes under the HomeBuilder scheme introduced last year and demand for government grants has outstripped Treasury’s forecast by more than 400 per cent. Joining me on the line now to chat all about it, Assistant Treasurer and Minister for Housing, Michael Sukkar. Good morning, Michael. Thanks for coming on 4BC Breakfast.
MINISTER SUKKAR:
Good morning, Neil. Thanks for having me.
NEIL BREEN:
It is a lot, 300,000. Did it surprise the government? I read earlier that it was a slow start to this but that it really picked up.
MINISTER SUKKAR:
Yeah, Neil, it was a pleasant surprise. We put in place the HomeBuilder program at the start of the pandemic. Before the pandemic we put in place our Home Guarantee Schemes which help first home buyers purchase a home with deposit of as little as 5 per cent, single parents to purchase a home with a deposit of 2 per cent, and the First Home Super Saver Scheme. All of those programs combined have directly lead to 320,000 Australians being able to get into a new home in the last couple of years – as you rightly point out – a long way ahead of what we thought but these are encouraging numbers. At a time when, with low interest rates, with relatively high house price growth, to see that first home buyers are at their highest levels for nearly 15 years is really encouraging.
NEIL BREEN:
Yeah it sure is. Look, interest rates is one thing, 0.1 per cent, the RBA is at pains to say – despite some mixed messaging – that that’ll be around until 2024. I suppose the concern is now you’ve got the Commonwealth Bank of Australia saying housing prices could drop by 10 per cent in the year 2023 after rising 20 per cent this year, 9 per cent next year, as the Minister for Housing, are you worried about a bubble?
MINISTER SUKKAR:
I spoke to the CBA earlier in the week on the same day that their economists made those forecasts. I mean if you put it into context, most capital cities have seen price rises over the recent period much higher than that. A moderation of house prices certainly doesn’t – at this point – concern the RBA or the banks who are ultimately the ones providing those loans. From a government perspective, what do we generally want to see? We want to see modest, moderate, steady house price growth. I don’t think there’s a bubble. In the end though, the government will keep a very close eye on these things and as we did during the pandemic. The HomeBuilder program which offered $25,000 grants to people to purchase a home, that was, yes, designed to help people get into their first home but also to protect the 500,000 Australians who worked in the residential construction industry, many of whom were facing the prospect of losing their jobs. We will always keep a very close eye on the million Australians who work in the industry and of course first home buyers who want to get into their first home and always adjust our polices to match the circumstances of the day.
NEIL BREEN:
The 21 per cent rise this year, it’s over the top but that’s the situation at the moment with those interest rates being low. But 300,000 new home buyers entering the market since the start of COVID – it’s a great result. Michael Sukkar – Assistant Treasurer, Minister for Housing – thanks for your time on 4BC Breakfast.