The Albanese government announced this morning it will fast-track its expansion of the First Home Guarantee scheme, bringing forward its start date to October to give buyers access three months earlier than promised.
Administered by Housing Australia, the scheme enables deposits as low as 5 per cent of a property’s value for eligible buyers, with the government acting as a guarantor on the remaining 15 per cent to help purchasers avoid mortgage insurance.
Mortgage Choice – Figtree broker Phil Wheatley said the two-fold savings of a reduced deposit and avoiding mortgage insurance repayments will help more first-home buyers get into the market, despite the policy’s potential market risk.
“I believe it’s got full support from the industry, and it’s certainly been positive in the last five years. The scheme has helped thousands of first-home buyers get into the market that wouldn’t have been able to previously,” Mr. Wheatley said.
“In terms of its longevity, the changes removing the income caps on borrowers and increasing the property purchase price cap, especially for markets like Wollongong, can only be a positive allowing buyers to look more broadly,” he said.
“It might potentially push some local prices up, but really overall I think it’s a positive.”
Source: Macrobusiness
Prime Minister Anthony Albanese said in a statement the policy was brought forward in the wake of last week’s economic reform roundtable, at which housing was a major topic.
“We want to help young people and first-home buyers achieve the dream of home ownership sooner. Bringing the start date of our 5 per cent deposit scheme forward will do just that,” Mr. Albanese said.
As part of the changes, the guarantee scheme’s previous cap of 50 000 buyers each year will be abolished with no limit on the number of new applicants and increased regional access.
Pat Mitchell, 34, is a long-term renter of 11 years who said while he was optimistic about the scheme’s expansion he feared it was short-sighted.
“I think that this policy is well-intended, I just think that it doesn’t do what it needs to do in the long-term such as addressing the over-saturation of investors in the market,” Mr. Mitchell said.
“If I had the money on hand right now this would be absolutely perfect, but if the prices keep going up, then five percent becomes last year’s 20 per cent,” he said.
