Agents slam shared equity scheme

31 May 2011 -

Real estate agents have voiced their concerns over the Western Australian government’s plan to roll out 2,000 shared equity home loans in a bid to boost housing affordability.

Earlier this week, Real Estate Business reported that the state government would revise and expand its low deposit shared equity loan scheme.

But real estate agents have slammed the initiative, with some labelling it “controlling”.

Speaking to Real Estate Business, Harcourts Maylands WA sales consultant Steve Lorrimar said buyers need to be aware of how a shared equity home loan operates prior to making any purchasing decisions.

“If possible, potential buyers are better downsizing their expectations by 20 per cent rather than giving the government complete control over how you can use your property, when you can sell it, how you can sell it and how much you can sell it for,” he said.

Bailey Roberts Group NSW, director/investment analyst Leith Thomas agreed with Mr Lorrimar and added that the scheme could artificially push up house prices by giving loans to people who should not have them.

“If the government is serious about making housing more affordable, they should stop getting involved in the private sector and let prices drop to a level where people are willing and able to transact.”

However, despite these concerns, RE/MAX WA managing director Geoff Baldwin said he supported the government’s initiative and believes the market will see an uptick in activity and buyer confidence as a result.

“Any scheme that boosts market activity and places potential home buyers in a position where they can afford to purchase property, I support 100 per cent,” Mr Baldwin said.

“These concerns by agents are unjust, we have seen similar government schemes like this in the past and they have proved to very successful. While the government does have a vested interest in the property, vendors need not to worry as the government’s concerns lay with how the property is managed.”