The Housing Minister was talking up the market last week. But some people thought he overstepped the mark.
This made me laugh.
Last week, new Housing Minister Michael Sukkar was accused of over-stepping the mark with his full-throated endorsement of the housing market.
Particularly around his advice to young buyers – that they should get into the market as soon as possible. From The Australian:
Housing Minister Michael Sukkar has urged first-home buyers to try to snap up a property now, ahead of the government’s signature loan deposit scheme starting next year, warning that housing prices are likely to increase.
Mr Sukkar’s bold comments come as the government puts the finishing touches on the First Home Loan Deposit Scheme, which Scott Morrison announced as a major pre-election promise. From January 1, it will enable some first-time buyers to purchase a house with as little as a 5 per cent deposit.
“If you’ve got an opportunity to get a foot in the market before then you should take it, given I think the market is starting to improve,” Mr Sukkar told The Australian. “People who buy now I don’t think will regret it at all.
“A re-elected Morrison government has put a lot more confidence into the market. We’re seeing green shoots in Melbourne and Sydney in the last quarter and I think with low interest rates, with APRA reducing serviceability buffers, all those factors combine to confirm that optimism.”
Some thought it was all going a bit far. Some thought he probably shouldn’t be telling first home buyers how to time their run into the most important financial decision they’ll ever make.
CoreLogic’s Cameron Kusher quipped, “It’s certainly unusual given that it isn’t a comment about housing policy and seems to be treading closer to investment advice.”
Giggle. Maybe he has a point there. Blindly telling first-time buyers to buy without making sure they know how to tell good deals from bad, probably isn’t great advice, financial or otherwise.
But he actually has a point. The market indicators are all suggesting that the market has bottomed. Prices in Sydney and Melbourne are already posting monthly gains.
It probably is a reasonable view – and one shared by the majority of commentators – that if you are a young buyer, and you are ready to buy, now is probably a good time to do it.
If you wait another six months, the market will probably be gathering momentum, just as a wave of new buyers empowered by the government’s First Home Buyer Deposit scheme hit the market.
Of course you still need to know what you’re doing. But other things being equal, I would say, yes, now is a good time to buy.
So ok, maybe this is a tad too courageous from our Housing Minister. Maybe it’s not the Housing Minister’s role to be dishing out financial advice.
But, no one’s arguing the toss on the point he’s making. Looking at current market momentum, looking at the coming changes to interest rates and the government’s deposit scheme – everything is suggesting that now is a good time to buy.