Care Inc. Financial Counselling Service, which campaigns to ensure low-income Australians are treated fairly and can overcome debt, has expressed concern that so many are locked out of the housing market. Director Carmel Franklin said the problem of young first home buyers and even middle-income Australians being excluded is a complex one to solve.
"A simple answer like 'more grants' may sound attractive, but in reality [that would] do nothing other than drive up house prices across the board," Ms Franklin told Real Estate Business.
"Some jurisdictions have specific schemes to assist people on lower incomes to enter the housing market – for example, the Land Rent Scheme [in the ACT], where people can just purchase the house and rent the land.
"Alternatively, there might be potential for some sort of rent-to-buy scheme that could be considered."
Ms Franklin said there needs to be a national conversation about the issue, with governments taking the lead and maybe making some tough political decisions.
She said one thing that should be avoided is giving people mortgages they can't afford, because home loans last for a long time and poorer borrowers can be vulnerable to interest rate rises.
"We certainly don't want lax lending standards that might lead to more people in financial hardship. The sub-prime lending market has caused a lot of hardship in the past," she said.
"It is important to be mindful that assisting people to buy a house is one thing, but maintaining their repayments – particularly if they are low-income – is next to impossible, because their lives and finances are so precariously balanced."