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Bond loans becoming more popular

By johnboy - 29 August 2011 7

Joy Burch has announced that demand is booming for the ACT Government’s bond loan scheme:

The ACT Labor Government has improved housing affordability for hundreds of moderate-income Canberra families, with latest figures showing a 70 per cent increase in the number of loans issued to help cover the cost of rental bonds.

The increased take-up of the Government’s Rental Bond Loan Scheme follows a decision in May 2010 to widen the eligibility criteria, including increasing the income threshold.

ACT Minister for Community Services Joy Burch said the new criteria had allowed more Canberra families to access interest-free loans to help cover the cost of rental bonds, helping them enter the private rental market.

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7 Responses to
Bond loans becoming more popular
SusanV 9:16 pm 22 Dec 11

The proceeds of the government bond loans are intended solely for the rental bond, and therefore cannot be used in other ways or for other purpose. The amount of the bond loan will be dictated by the number of bedrooms of the leased property and the number of household members who will live their. At the end of the lease period, the bond loan will be paid back by the borrower in its entirety, regardless of the actual cash loans amount refunded by the landlord.

screaming banshee 8:40 pm 30 Aug 11

Bluey said :

Middle income welfare state is where its heading.

Pretty sure we’re already there

poetix 5:19 pm 29 Aug 11

When I first moved to Canberra (in the early Palaeolithic period) I had to take a bank loan to pay the rental bond and other necessary expenses. So if the government rate is less than commercial rates, this has to be good for renters, particularly those setting up house for the first time.

But it is an indication of just how dear it is to find any house, and how saving a deposit to own a house is often so difficult, if one is renting in the mean time.

Bluey 4:44 pm 29 Aug 11

hax said :

Bluey said :

Does that not say that housings becoming MORE unaffordable if more people have to resort to a loan scheme for a rental bond?

It’s just one of many little schemes that would appear to be helping, when in fact it’s causing things to get worse for more people in the long run. Just as land rent will allow the price to keep going up, even though fewer people can actually afford the market price.

These things are ok in isolation, but looking at the big picture I feel uncomfortable where it all seems to be heading..

Middle income welfare state is where its heading.

hax 4:14 pm 29 Aug 11

Bluey said :

Does that not say that housings becoming MORE unaffordable if more people have to resort to a loan scheme for a rental bond?

It’s just one of many little schemes that would appear to be helping, when in fact it’s causing things to get worse for more people in the long run. Just as land rent will allow the price to keep going up, even though fewer people can actually afford the market price.

These things are ok in isolation, but looking at the big picture I feel uncomfortable where it all seems to be heading..

frontrow 4:14 pm 29 Aug 11

I don’t know what the old income thresholds were, but the current ones are amazingly generous. They are prepared to give one of these loans to a single person with no dependants earning $76k pa. I’m surprised that the takeup is so low.

Bluey 3:40 pm 29 Aug 11

Does that not say that housings becoming MORE unaffordable if more people have to resort to a loan scheme for a rental bond?

Great the service is there to help people. Shame they need it thats all.

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