Scott Morrison says it’s ‘always been hard to buy a house

Scott Morrison has revealed how he struggled to save up a deposit for his and wife Jenny’s first home, as he details the government’s plan to extend its ‘home guarantee’ scheme.

Mr Morrison’s plan allows first home buyers to purchase a property with either a 2 or 5 per cent deposit. 

It was originally set to end in June, but it will be extended in Tuesday night’s Budget over concerns about rising property prices.

The government will also establish an additional scheme for people in regional areas, where house prices have surged in the wake of the pandemic. 

On Monday morning, Mr Morrison told reporters that it was ‘hard’ for him and his wife to save for a deposit back in the 90s, but acknowledged it’s much ‘harder’ now.   

‘The hardest thing to do when you’re buying your first home – and I remember this when Jenny and I were buying our first home and it was hard back then, I believe it’s harder now – was the deposit you needed to pull together, and that was a 20 per cent deposit.’ 

Mr Morrison bought his first home in 1995 for $330,000, a standalone property in the ritzy eastern Sydney suburb of Bronte. 

He sold it for for $985,000 in 2009, which amounted to a capital gain of more than 198 per cent.

Mr Morrison then explained how the government’s first home buyer scheme had made it easier for Australians to get on the property ladder, by cutting down the time needed to save for a deposit.

‘So by the government underwriting that deposit, you could bring it back to 5 per cent, and so that massively cut down what you had to save in order to get yourself into a first home,’ Mr Morrison explained. 

‘I’ve met young people in particular, who have been able to get into this rising housing market quicker, whether it’s here in Sydney or down in Melbourne, or elsewhere, and they have got into there first home eight-years sooner because of that change.’ 

‘That’s how we’ve helped people beat the rising housing market and get themselves into a first home.

However the scheme has faced criticism, because it can only be used on homes under a certain price guide outlined by the government and a person is eligible if they earn no more than $125,000 a year and $200,000 for couples. 

For example the price cap in Sydney is $800,000, while in Melbourne it’s $700,000. This is despite Sydney having a median house price of $1,601,467, while Melbourne’s was $1,101,612.

The median unit price in each of those cities was much cheaper, coming in at $800,000 for Sydney and $593,000 for Melbourne, both within the threshold needed to be eligible for the first home guarantee scheme.

During the press conference, one journalist put Mr Morrison on the spot by asking: ‘Should it have been adjusted with the rising cost of housing? It’s been three years, the housing price has gone up – how are people going to get into a home in Sydney?’

However, Mr Morrison’s answer did not address the question at hand.

‘Let me point out the programme again,’ he said. ’20 per cent down to five per cent. If the prices are rising, it is five per cent or 20 per cent of the increased price. So the ability to cut that down by 15 per cent makes all the difference.’