Do Labour even understand basic economics?

Matthew Hooton correctly points out the obvious flaws in the Labour government’s idea for shared equity schemes to enable broken-arses to “buy” houses: Quote:

People struggling to buy a home could soon be given the opportunity to co-own a property with a bank or government agency to make it more affordable.

A shared equity scheme, which is being considered by the Government, could save first-home buyers up to $100 a week compared to a commercial mortgage.

Officials have begun work on the policy, though it is not expected to be in Thursday’s Budget.

Under its Kiwibuild programme, the Government is planning to build 10,000 houses a year, which will be sold at up to $650,000 to first home buyers.

Housing Minister Phil Twyford said that price was still out of reach of a large portion of the population.

“I’ve got officials working on shared equity because we know that even the Kiwibuild price brackets are not affordable for lots of people,” he said.

“There’s no way they could take on a $600,000 mortgage ? a $400,000 mortgage, maybe, then you’d get a much bigger group of people.”

The shared equity scheme would allow a third party such as a bank or a government agency to co-own a property by taking on a share of the mortgage. That would reduce the owner’s deposit and weekly mortgage payments.

The owner could then buy the remaining share off the third party when they could afford to, including any capital gains.

It appears that if the scheme goes ahead, it would be limited to first home buyers on a modest income. End quote.

This will surge demand for homes as broken-arses think all of a sudden that they can “buy” a house. I don’t know where anyone gets this idea that everyone can buy a house… they can’t, and if you are living life as a work-shy bludger there is no way you can ever afford a house. It takes hard work, dedication and savings.

Unfortunately, the younger generations think they should have a right to buy a brand new house. Not for them to buy a shitter in a crappy suburb and do it up and then on sell and move up. No, they want it all now. There is no short cut. It takes dedication and there really is no reason why it can’t be done.

This plan will fail and make the so-called housing crisis even worse.