“Out of touch” Turnbull’s housing affordability dilemma: how much would parents have to shell out?
Prime Minister Malcolm Turnbull is under attack for suggesting wealthy parents should “shell out” to help their children enter the housing market. Just how much cash would they need?
In an interview with ABC Melbourne radio host Jon Faine this week, Prime Minister Malcolm Turnbull suggested that “a wealthy man” like Faine should “shell out” for his children to buy a home. “You can provide a bit of inter-generational equity in the Faine family,” Turnbull said.
The issue of housing affordability has become increasingly prominent in recent months. Labor's proposed changes to negative gearing are partly designed to address perceptions that first home buyers are being squeezed out by baby boomer investors and will only be able to afford houses if there's a property collapse. However, some studies suggest that fundamental affordability hasn't changed.
Opposition Leader Bill Shorten seized on Turnbull's comments during question time and said Turnbull was "out of touch". "Is that really the Prime Minister's advice for young Australians struggling to buy their first home? Have rich parents?" he said, the Sydney Morning Herald reported.
Faine would certainly need a relatively large sum of money to help his children out. A 20% deposit for a median-priced house in Melbourne would run to $117,000.
The evidence suggests that Turnbull has probably assisted his own children in this way. Labor Senator Doug Cameron asked during question time if Turnbull had helped his daughter, a history teacher, purchase her multi-million dollar unit in Sydney’s eastern suburbs.
"I know that history teachers in New South Wales, after a number of years of experience, are on about $65,000 a year. But Miss Daisy Turnbull Brown is able to buy a sub-penthouse, with knockout views of the harbour and city skyline, in 2008 - she was then aged 23 - for the pricey sum of $2.7 million," Cameron said.
A 20% deposit for a $2.7 million would be $540,000, and the monthly repayments on a 30-year loan for the remainder at 5.5% per annum would come to $12,264.24.