A few lucky people squeezed out of the housing market by investors will be able to get their foot in the ownership door, after Mirvac’s announcement that it will give first dibs to first home buyers for a small number of cheap apartments in its new Sydney Olympic Park development.
Buyers of the 60 apartments set aside from the 690-apartment Pavilions residential development will also be able to put down just a five per cent deposit to secure an apartment, half of what is typically required off the plan. The buyer can then put down the remaining five per cent in two annual payments.
Mirvac chief executive and managing director Susan Lloyd-Hurwitz said housing affordability was not a simple problem with a simple solution, but said the company was compelled to act as Sydney’s high prices meant a generation of people faced the prospect of never owning a home.
“There are a number of barriers that first home buyers face including the high deposit hurdle and a competitive market, and we can start to address these issues right now and give hope to first home buyers who’ve given up on the dream of home ownership,” she said.
The apartments being offered range in price from $575,000 to $749,000, whereas apartments open to all buyers are priced at up to $2 million.
NSW planning minister doesn’t support negative gearing reform
New NSW planning minister Anthony Roberts was at the launch of Pavilions, and congratulated Mirvac for its initiative.
“Mirvac has demonstrated that developers can also assist by introducing socially responsible schemes such as putting aside a percentage of properties for key workers and first home buyers while we work on the longer term issues,” he said.
He said affordability had to be tackled on many fronts. However, he also told journalists at the launch that federal adjustment of negative gearing was not one of them.
“There are a number of levers to be pulled at all levels of government,” he said.
“A change like [negative gearing] will hit all states where, quite frankly, affordability is not a problem.”
Calls to reform negative gearing have increased in recent days, with the Reserve Bank governor Philip Lowe on Friday saying changes to it and capital gains tax concessions could take the heat out of the housing market; and the Australian Council of Social Services saying revenue could be boosted $300 million a year if it were restricted to new properties.
- See also News from the front desk No 327 – On the housing affordability crisis and radical solutions
While former NSW planning minister Rob Stokes had voiced support for reforming negative gearing, Mr Roberts is focused on increasing supply as the “most critical” housing affordability solution, despite evidence that increasing supply alone is ineffective. His department is currently in the process of hiring seven new staff to focus on increasing housing supply.
The NSW government is gearing up to release an affordability strategy that is also expected to include adjusting the rental framework.