The biggest obstacle to home ownershersip
15 November 2004
Hon Matt Robson MP, Progressive Deputy Leader
The deposit gap is the biggest obstacle to home ownership
The biggest obstacle to home ownership is the deposit gap - the problem of saving enough to pay a deposit for a house, Progressive MP Matt Robson says.
He is welcoming Labour's support for a subsidy to help home buyers meet mortgage payments.
But he's warning that unless families are helped over the deposit gap, interest assistance will be almost useless in increasing home ownership.
"To those who want to say they will help with interest payments, I say what are you going to do about the deposit gap? If you don't address the deposit gap you are not going to make any significant difference to home ownership rates."
Progressive began a campaign on housing today. Under the Progressive housing initiative, families will be able to choose to capitalise family financial support to create the deposit for their own home [Capitalisation means that you collect future payments now, and forgo weekly support over the period indicated].
"Once new increases to family financial support payments are made from April 2007, mortgage repayments won't be impossible for low and middle income families," Matt Robson said.
"The real obstacle will be saving more than $20,000 needed for a deposit on a house. Capitalising Family Support is the best way to bridge the deposit gap."
Example of capitalisation: A family with a household income of $50,000 in 2007 will receive $69 per week for their first child. They can capitalise 6 years of family financial support to get a deposit of $21,528. With a 30-year mortgage at 7.25 percent interest, repayments would total $305 per week.