An interest rate cap for first-home buyers would provide a much needed boost to those struggling to enter the housing market, according to the Property Council.
Chief Executive Mike Zorbas said first homebuyers needed to be given a realistic chance at accessing finance for housing.
Mr Zorbas said the Property Council suggested targeted government support through a cap on interest rates for Australians building their first new home.
He said the First Home Buyer Accelerator Loan Scheme would help first-time homebuyers of new homes or apartments by limiting deposits to five percent and ensuring the bank charges a capped interest rate, with a government guarantee to support the lender.
“That cap will be either the official RBA cash rate or five per cent, whichever is greater, for a period of five years.”
Mr Zorbas said helping more Australians into homes should be the highest priority.
“With cost-of-living pressures and housing affordability consistently the two issues of most concern for Australians, the government can and should use its balance sheet to support first-home buyers and the delivery of new homes.
“Our proposal will help first-home buyers save (on current rates) up to $1087 every month and $13,044 annually.”
He said the policy required zero up-front government spending and would be subject to appropriate credit checks and serviceability assessments, meaning future exposure would be minimal.
“The scheme should be targeted, regularly reviewed and applied where it is driving new supply. Done right, it will help thousands of Australians onto the property ladder,” he said.
