Regulation prevents first home buyers from owning


In Tauranga, you can rent a three-bedroom house for $500 per week. Or you could buy a similar home for $400k and outlay the same $500 per week on rates of $2k pa and mortgage interest, based on the median mortgage interest rate fixed for two years of 5.99% on a $400k mortgage.

So what is stopping people from owning their own home? Regulation. The government has stipulated the 20% deposit required for first home buyers.

Banks are happy because the 20% deposit is their buffer in the event of a forced sale.   The homeowner who lost their job, and now their home, is at the mercy of the bank who determines how much, if any, of their $80k cash deposit they get back from a mortgagee sale.

The bank recovers their money by flicking the property for a quick sale, below market value if necessary, because all they want is their own money back. The homeowner can go begging for all they care.  Little wonder many of us despise banks especially when they’ve got the government in their pockets.

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