The recent call for a first homebuyer strike from the tax reform group called Prosper Australia has received a fair amount of publicity. It’s one of those irresistible headline-grabbing stories the media loves – a little like Dick Smith’s two children per family policy.
The proposal calls for first homebuyers to go on strike and refuse to purchase into a market that’s typically rising between seven per cent and 10 per cent a year. I can fully sympathise with the emotions behind this campaign. Single first homebuyers fighting to save a deposit while they’re caught on the rental roundabout are essentially priced out of the market unless they lower their expectations, or opt to purchase in the outskirts of the city.
At around 15 per cent, the number of first homebuyers currently in the market reflects these difficulties. However this isn’t because the will to purchase property has diminished. During 2009, while the Federal Government dangled the carrot with generous incentives in the form of the First Home Owner Boost – offering in some cases up to $32,000 towards the purchase of a new home – first homebuyers were at record levels.