Mike Hosking: First time home buyers need a leg up

One of the great myths of the modern economy is the idea that young people can't afford a house.

Now, the facts are that for every house sold, about a quarter of them, sometimes a little bit more, about 27% are in fact first-timers. That figure has been remarkably solid over any number of years in any type of market.

Can it be expensive? Yes. Do some people miss out? Yes. Are some areas better or worse than others? Yes.

But in a world where the negative sells, if you can convince people that the young are victims, it can become very political very fast. Of course, no government can manipulate the market, and for all the governments that are promised a solution, it more often than not ends and tears.

And for every lever you pull, there is a counter reaction elsewhere, which is why it is often best to leave the market to its own devices.

Australia though is dabbling in housing as we speak. The latest scheme involves getting first buyers or first time buyers into their own place with a 5% deposit. Any first timer, any salary.

Personally, I've always liked the idea of getting, young people into housing, easier entry, the better often the real impediment, and it's true here, of course, is not the mortgage, but the down payment.

I mean, 20% of a million bucks, which is basically the equation in a lot of New Zealand is $200,000. That's a mountain for most and an insurmountable one. Even $100,000 is hard work, but what about 50? $50,000 5%, that's not hard.

Small town New Zealand, you go to a cheaper place. $600,000 house, $30,000. That's doable. That's your average Kiwi saver. Why aren't we doing that? Do you lose on housing? Really?

Is it a good long-term investment? Yes. In Australia, they kept the price to a first home type level. So for example, at the moment in Sydney, it's 1.5 million less in Melbourne, but what it will do is get more people into houses.

Do people want that? Yes, they do.

The Reserve Bank worries about a price surge, but this is being done ironically in the middle of a price surge. Australian housing is often running. The debate about affordability is raging hot, and yet the government is all for it.

And note, it's a labour government.

So what about us? Does our housing market need a boost?

Yes, it does. The first timers need a leg up, see?

What's stopping us?

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