The federal government will officially take a stake in the homes of 10,000 first home buyers from January 1 after Labor won the May 21 federal election.
The Help to Buy scheme concerns KR Peters Director Peter Nicolls who has previously called for government stimulus to be withdrawn from Australia's overheated housing market.
Help to Buy is open to singles earning up to $90,000 a year and couples earning up to $120,000 per year. Under the scheme, the government co-buys up to 30 per cent of an existing home and 40 per cent of a new build. The buyer only has to stump up a minimum deposit of 2 per cent of the portion of the home they own. When the home is sold, the government takes back its investment plus a portion of the capital growth.
The government has stated there will be no forced sales of property.
The scheme is one of four designed to help first home buyers enter the market.
The others are:
* The Regional First Home Buyer Support Scheme for first home buyers already living in regional areas. Under this scheme the government guarantees loans to avoid lenders' mortgage insurance leaving buyers to stump up a 5 per cent deposit.
* The existing Home Guarantee Scheme.
* The Family Home Guarantee Scheme for single parents introduced by the Coalition Government will also continue.
The defeat of the Morrison Government means the Coalition's pledge to allow first home buyers to use their superannuation for a home deposit won't proceed.
Mr Nicolls said it was a precarious time to be introducing new schemes into the property market.
"Interest rates are heading towards 4 per cent plus and consumer confidence is falling. Victoria's population is shrinking and inflation shows no sign of slowing down," he said.
"House prices are definitely tanking. I'm seeing that properties are taking longer to sell. If a vendor has time to wait they are still getting the price they want, but sales are definitely taking longer."
Mr Nicolls said building supply chain issues were hampering the construction industry, creating a blowout in build to rent programs and creating further supply side issues.
"What the government can do to help the building industry is cut all building grants and open immigration back up to normal levels," Mr Nicolls said.
Mr Nicolls is also concerned a Labor Government will not move aggressively to reduce the nation's debt and that a 5.1 per cent wage rise backed by Prime Minister Albanese during the campaign would put extra pressure on businesses and inflation.
Mr Nicolls says he has grave reservations that schemes which reduce significantly the deposit needed to secure a property are not in the best interests of buyers or the market.
"My view is that if interest rates go up, which they will, there is a strong possibility we will see a decline in property prices. If someone has only put in 2 per cent that doesn't even pay the stamp duty. If they walk away because they can't meet repayments and ongoing costs the government will be left holding the baby.
"We are in for a very interesting time ahead."
The Help to Buy scheme concerns KR Peters Director Peter Nicolls who has previously called for government stimulus to be withdrawn from Australia's overheated housing market.
Help to Buy is open to singles earning up to $90,000 a year and couples earning up to $120,000 per year. Under the scheme, the government co-buys up to 30 per cent of an existing home and 40 per cent of a new build. The buyer only has to stump up a minimum deposit of 2 per cent of the portion of the home they own. When the home is sold, the government takes back its investment plus a portion of the capital growth.
The government has stated there will be no forced sales of property.
The scheme is one of four designed to help first home buyers enter the market.
The others are:
* The Regional First Home Buyer Support Scheme for first home buyers already living in regional areas. Under this scheme the government guarantees loans to avoid lenders' mortgage insurance leaving buyers to stump up a 5 per cent deposit.
* The existing Home Guarantee Scheme.
* The Family Home Guarantee Scheme for single parents introduced by the Coalition Government will also continue.
The defeat of the Morrison Government means the Coalition's pledge to allow first home buyers to use their superannuation for a home deposit won't proceed.
Mr Nicolls said it was a precarious time to be introducing new schemes into the property market.
"Interest rates are heading towards 4 per cent plus and consumer confidence is falling. Victoria's population is shrinking and inflation shows no sign of slowing down," he said.
"House prices are definitely tanking. I'm seeing that properties are taking longer to sell. If a vendor has time to wait they are still getting the price they want, but sales are definitely taking longer."
Mr Nicolls said building supply chain issues were hampering the construction industry, creating a blowout in build to rent programs and creating further supply side issues.
"What the government can do to help the building industry is cut all building grants and open immigration back up to normal levels," Mr Nicolls said.
Mr Nicolls is also concerned a Labor Government will not move aggressively to reduce the nation's debt and that a 5.1 per cent wage rise backed by Prime Minister Albanese during the campaign would put extra pressure on businesses and inflation.
Mr Nicolls says he has grave reservations that schemes which reduce significantly the deposit needed to secure a property are not in the best interests of buyers or the market.
"My view is that if interest rates go up, which they will, there is a strong possibility we will see a decline in property prices. If someone has only put in 2 per cent that doesn't even pay the stamp duty. If they walk away because they can't meet repayments and ongoing costs the government will be left holding the baby.
"We are in for a very interesting time ahead."