18-05-2025
Barefoot Investor warns against 'stupid' real estate change that is going to push house prices up even further in Australia: 'Rise by 10 per cent'
The Barefoot Investor has warned the government's first home buyer scheme will worsen housing affordability and put vulnerable Australians at risk.
Scott Pape said the scheme, which promises to allow first home buyers to purchase on just a five per cent deposit, would 'just push prices higher'.
'I caught up with my old mate Louie Christopher from SQM Research, who's predicting that in this calendar year property prices are going to rise by up to 10 per cent!' he wrote in a column for NewsCorp.
'The first home buyer deposit policies are stupid. They will just push prices higher, says my mate Louie.'
Mr Pape claimed Prime Minister Anthony Albanese and Treasurer Jim Chalmers wouldn't suggest such loans to their own families.
'None of them would sit down at Sunday lunch and tell their sister (if she was a single mum on a low income) to go out and buy a house with a 2.5 per cent deposit,' he wrote.
'Instead, they'd say: What if interest rates go up? What if you lose your job?'
Mr Pape warned the consequences of such policies were already evident, sharing a letter from a reader named Sarah.
'Two years ago I purchased my first property using the Government's single parent grant, which meant I only had to save a 2.5 per cent deposit,' she wrote.
'Unfortunately, with the rise in interest rates and cost of living, I can no longer sustain the cost of my mortgage. My daughter and I are really struggling.'
Mr Pape said he would offer Sarah financial guidance in an upcoming column, but added a grim prediction.
'It'll be a good warm-up. After all, come January 1, when Labor's five per cent deposit policy kicks in, there will be a lot more Sarahs coming through the door,' he wrote.
'Tread your own path.'
At the federal election Labor confirmed it would allow all first home buyers to access five per cent deposits with no income caps or place limits.
The party also pledged to build up to 100,000 homes reserved for first-time buyers.
Former Opposition leader Peter Dutton told voters he would allow them to use some of their superannuation to fund their first home purchase.
Last month, the Barefoot Investor compared Aussie homes to 'sardine tins sold at caviar prices' in a brutal swipe at both political parties' attempts to solve the housing crisis.
Mr Pape said he spent four hours of his long weekend driving across Melbourne with his 11-year-old son who quickly noticed a key phrase on election billboards splashed around the city: 'Cost of living.'
The finance guru noted his son was 'spot on' but claimed neither Labor nor the Coalition were doing much to address the issue.
'The biggest cost? The roof over our heads - rent or mortgage. That's where the squeeze is,' he wrote in a column for the Herald Sun.
'Australian homes are now some of the least affordable on Earth. And to afford them we've racked up world-class debt.
'Back in the mid-2000s, the average house cost four times the average income. Now it's more than eight.'
Mr Pape claimed the current housing market had 'priced ordinary Australians out of their own neighbourhoods'.
Yet, Mr Pape claimed both have only offered options that will put more money into the hands of pre-existing property owners.
In good news for Australian borrowers, however, those with an average mortgage could save $100 a month on their repayments following an expected interest rate cut next week.
Most economists are expecting the Reserve Bank of Australia to cut the cash rate by another 25 basis points, from 4.1 per cent now to 3.85 per cent, at its May 20 meeting.
Financial markets regard a quarter of a percentage point rate cut on Tuesday as a 95 per cent chance.
