Hello, we're from the government and here to help

[crashy]

Hello, we're from the government and we're here to help solve the housing crisis.
1. Hey, we think you should be able to buy a more expensive house, so here's an increase in the property price cap. Wait, why are you now looking at more expensive houses? Stop!

2. Want to buy a new build as a first home owner? Here's $10k cash to add to your deposit. Oh and you can leverage that by a factor of 20 because we are going to allow you to use a 5% deposit. Oh, yes, I guess that does mean that you can now afford to pay $200k more for a house

3. We have a supply and demand imbalance. Let's solve that by increasing the number of people who qualify for the first home owners grant and lower the deposit requirements. Wait! Why are so many of you wanting to buy a house now? Stop!

4. We have a shortage of new builds. Let's give first home owners a financial incentive to buy them, and not old houses. Hell, let's also give investors a financial incentive to buy new houses, and tax the hell out of old houses. Wait! Why are you all fighting over the new builds! Why are you bidding over the top of each other! You are making the price go up! Stop!

5. We want the wealthy to own less property. So we are going to make buying an investment property cashflow negative, so that only people in the highest tax bracket can afford to pay the shortfall.

We want to punish investors, and help first home owners and renters. We hope you will appreciate our economic solutions for the true genius they are. Remember, we are here to help!

[hawkeye]

To be honest I think they should remove those caps completely as they are bunching all the first home buyers up into a very small market. If they let those people who want to buy a more expensive house do so it would spread them out over more properties.

At the moment with the prices so much higher over 3 months they have not really done anything but put limits back relatively to where they were a few months ago. if the range stays still and the average price increases that is moving the top end of the bracket out of the houses that qualify. Sorry to be so wordy!

Here’s some numbers
if range is under 500k and there are 100 houses mostly near the top if prices increase 10% that might mean there are now only 50. And more buyers as half who wanted to buy last month missed out and and a new bunch joined.
So 120 buyer now for 50 houses. That is the problem.

So allow eg parents to take up to a 20% stake and still qualify with the condition that fhb can buy other 20% when they can afford it.

Then the range might be up to $700k for example and 500 houses to choose from.

I do like your example but It is true that if some more people can buy there will be less renters so I don’t think it push prices much higher if they just let people buy anything.

[crashy]

I saw this play out in Australia. They introduced the FHOG and overnight every property went up $14k, and the number of buyers doubled. Then they said "oh well 14k isn't enough, we better increase it" and again, overnight all properties went up and the number of buyers jumped. They are trying to suppress prices by increasing demand. That's obviously going to do the complete opposite

[Engineer]

Woman’s logic ( jacinda and grant )
Put the price of cigarettes up by increasing taxes on cig.
Prices of cigarettes won’t increase
The dairy owner will pay.
Swap cigarettes for rents

Sorted