The Housing Affordability Fund (HAF) has recently launched a $512 million initiative aimed at boosting the housing economy by offering home buyers a desperately needed shot in the arm to help them be able to afford the cost of a new home. Currently housing prices are too high to be easily affordable for the average builder and developer looking at entry level residential homes. The market has a large quantity of these homes but with costs so high there is an influx of properties that are not affordable.
The high cost of these new dwellings is due, in part, to local governments charging fees for a wide variety of community and social facilities such as libraries, roads, and childcare facilities. The Housing Affordability Fund hopes that by making a financial contribution available it will help to ease the burden of buyers who have to incur these additional costs that are usually added into the price of the land and home as a package deal.
What HAF Can Potentially Do
If the Housing Affordability Fund initiative passes it will provide a considerable saving to developers. For instance if the HAF succeeds in passing a relief of $20,000 that would equate to a $50,000 savings over the life of a 30 year mortgage. This initiative would help to improve the affordability of housing and promote a better planning system for future home developments as well. Many developers and home buyers have been frustrated with the extra costs and the delay due to red tape and poor planning systems.
What HAF Might Mean To Property Investors
Another reason that this initiative might be potentially beneficial for property investment is that it has the means to build the housing economy up and minimize the frustration associated with purchasing a home. Many Australians are fearful of making a new home purchase because they regard real estate as being unaffordable. It is important to get into the property market as soon as possible and stay there for a significant amount of time. If current trends continue, the value of property should continue to go up, not down. The HAF housing initiative should help to alleviate some concerns of those who are looking at a home as a long term investment.
Sean Rasmussen
Property Options Australia
Property Options Blog © 2006 – 2008
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Hi Sean,
I’m not sure what the Housing Affordability Fund is. Is this what the First Home Owners Grant is? Maybe not though, as it seems to benefit developers as well. And it only applies to new homes.
Whatever it is, it sounds like it would help buyers with their new home purchases.