Critical comparative analysis of affordable housing policy for young people
A Summary of Conclusions from Assignment 1
As noted in the previous assignment, “the affordable housing policy in Australia, and its relation to young people in New South Wales”, is ineffective. According to Yates, Kendig and Phillips (2008, p. 2), “home ownership rates for young people aged between 25-34 years, in The NSW, have drastically declined from 56 percent in 1991 to 47 percent in 2011”. Eslake (2013, p. 6) posits that this decline brought about by lower house affordability. However, the current measures in the NSW, aimed at addressing this issue, including the first home ownership scheme, seem to have a negative impact on house prices, and, fail to provide young people with affordable houses. This paper therefore examines the two similar programs that have the potential to be “borrowed” and be applied in the NSW. These programs are Shared-equity homeownership policy and the Help to Buy Equity loan scheme. The former is a housing strategy that is currently being applied in the United States, while the latter is in the United Kingdom. This paper argues that the shared-equity policy is the best option for the NSW government to help more young people buy their first homes.
A Brief Summary of the Shared-equity homeownership policy and the Help to Buy Equity loan scheme
Shared-equity homeownership is a housing strategy that incorporates responsibilities, rewards, and risks of homeownership in shared manner between households, who buy homes at prices relatively lower to the market price and organizational agents, who oversees the quality, security, and affordability of those homes after purchase. The affordability of these homes is preserved for future lower-income buyers. The policy is implemented at local government level, with each state having its own set of policies concerning shared-equity homeownership (Davis, 2010, p. 261). The “Help to Buy” equity loan scheme on the other hand, is a housing strategy in which house buyers are offered a certain proportion of equity……………………………………………………