The prime minister Mr. John HOWARD recently proposed this new concept to help families to easily own their own property. The proposal is to allow banks and/or institution to jointly own the property with the residing owner. I will like to know how this would impact, if at all, on the WRAP market. Your opinions would be much appreciated.
Hi,
I have only heard what has been written in the paper about this issue, which is pretty much speculation at best.
It seems to me that the government wants housing to remain affordable to the first home buyer, which is an interesting policy given the recent FHOG and also dramatic increases in property prices.
I’ll reserve my opinion until I am able to read more and understand what options are on the table. Personally, as a cashflow investor, I’m not sure how it would work… but then again I don’t know all the finer details.
I’ll comment more about this in future newsletters when more is known.
Bye
Steve McKnight
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi Steve,
Thanks for your response. I think you are right about the government wanting to help the first home buyer. If the concept is available to all, it will have a major boost to the property market causing price inflation to the point of bursting. This is because those who already own (or almost own) their property would want to upgrade. They would want to take advantage by moving to a more expensive suburb for not much more additional cost.
On the other hand if it is available to FHO (probably capped at say $250,000) only, we are then going to see a lot of activity in the lower end of the market; which would have a degree of impact on the WRAP market. Frankly, I can’t see why banks would want to get involve in owning properties with low growth potential.
I guess we will just have to wait and see what will happen.
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