Financial Regulation and Housing Submission to the Senate Economics Committee

The CIS has discussed taxa on of housing in previous parliamentary submissions; in par cular, Sec on 3 of our submission to the Falinski Inquiry. [...] However, if the borrower and lender are willing to take that risk – with the higher insurance payments and interest rate it might involve – it is difficult to see who is be er off by preven ng the loan. [...] Defaults a er 5 years are uncommon, and a risk that can be foreseen several years in advance is one that the borrower and the market can avoid. [...] If the buffer is to be maintained, it should be propor onal to the share of the mortgage at variable rates over, say, a 5-year horizon. [...] Advocates of house price futures have called on the government to pay for some of the transac on costs that make the market illiquid.