Australia’s crippling housing affordability problem is shaking up postwar norms about ownership. It’s also prompting a rethink about financing.
Already a subscriber?Mirvac chief executive Campbell Hanan has thrown his weight behind the push to develop lower-value mortgages, allowing more first home buyers to step on the housing ladder by acquiring a home without land in a housing estate or master-planned community.
It is also prompting a rethink about the financing needed to secure new options. Last week Stockland CEO Tarun Gupta told Commonwealth Bank of Australia CEO Matt Comyn that buyers in the US could get a loan for a home in a land lease community, but in Australia they could not.
Mortgages for homes with little land value already exist for apartment purchases. In an off-the-plan apartment purchase, land value could be worth only 5 per cent of the total, Grattan Institute economic policy program director Brendan Coates said.But buyers may not build up much equity through a home-only purchase, Mr Coates said.Financial Review“You might find there may not be that much extra equity because the price might not rise.
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