The Barefoot Investor Scott Pape has issued a harsh reality check to an Aussie couple who bought a home with a 5 per cent deposit and are now on the verge of bankruptcy. The finance expert has been highly critical of the government home-buying scheme, arguing it will push property prices up and saddle first-home buyers with a huge amount of debt.
The Aussie couple wrote to Pape for help after sharing they had saved $40,000 and got into Sydney’s property market in early 2024 using the 5 per cent deposit scheme. The Home Guarantee Scheme was expanded in October and now has no income or placement caps, along with higher property price caps.
The couple shared that not long after settling into their Sydney apartment, they discovered why it seemed so affordable.
RELATED
“There were serious waterproofing issues, and our strata fees jumped from $1,500 to $2,500 per quarter,” the couple said.
“Worse, from the first night we realised we were in a terrible neighbourhood. The noise was constant. When we tried to talk to neighbours, we got late-night knocks and harassment. Our young children were terrified.”
The couple said they “couldn’t take it anymore” and moved out after 18 months. They have now rented elsewhere and listed the apartment for sale. But five weeks later, they said they had received no interest from buyers.
“We’re paying both rent and the investment loan. Our agent wants us to drop the rent per week $150 below market. If we sell, we’ll break even but be locked out as Sydney prices soar. If we hold on, we risk bankruptcy,” the couple said.
Do you have a story to share? Contact tamika.seeto@yahooinc.com
The couple claimed they “followed all the Barefoot steps”, but Pape wasn’t having a bar of it.
“In which Barefoot Step does it say to take out a loan with a 5 per cent deposit?” he wrote in his weekly column.
Pape argued the couple had followed a “dud policy” and told the couple they should stop listening to politicians and “take responsibility” for their own decisions.
“Let me hold up a mirror: You rushed into buying it. Now you’re rushing to sell it. See the pattern?” he said.
“Here’s my hunch: I think the two of you know what you need to do. So, book a Barefoot Date Night for this coming week and get a realistic game plan on where to go from here.”