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Can’t afford soaring rent? Buy a house, says the PM

Poppy Johnston
·3-min read
Scott Morrison and for lease signs
Renters aren't sold on PM Scott Morrison's solution to rising rents. (Source: Getty)

Prime Minister Scott Morrison has been blasted as “out of touch” after he told Australians facing rental stress his solution was to “help them buy a house”.

Responding to a journalist’s query about the lack of funding for rent relief in the 2022 Budget, Morrison said the Government's solution was to “help Australians get into homes”.

“The best way to support people who are renting a house is to help them buy a house,” Morrison said.

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He said helping first home buyers into the market was a key focus of the 2022 Budget.

On Monday, ahead of the Budget’s release, the Government announced the expansion of the Home Guarantee Scheme.

Under the changes, 35,000 first home buyers - up from 10,000 last year - will be able to buy a property with only a 5 per cent deposit, with the other 15 per cent of the loan guaranteed by the Government.

The Federal Government also announced on Monday a new home guarantee scheme targeted at the regions.

Given the rising cost of rentals - with rents going up by as much as 20 per cent in some regional areas - many were left wondering how renters were expected to save for a deposit, even if it was heavily discounted.

Just finding a rental is tough in much of the country, with vacancy rates of zero per cent in some suburbs. This means rental properties are being snapped up the moment they become vacant.

Home Guarantee Scheme - is it everything it’s cracked up to be?

Morrison said his Government had directly helped 300,000 people get into their own home as a result of the Home Guarantee Scheme and other measures put in place since the last election.

However, the Home Guarantee Scheme has been criticised for encouraging first home buyers to take out large loans in the face of a forecast rise in interest rates and drop in property prices in major cities.

This could see homeowners ending up in negative equity and owing the bank more than the property is worth if they buy, experts have warned.

Another possible downside of the scheme is its potential to raise house prices, as some experts have pointed out.

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