The federal government has said it will extend access to its Home Guarantee Scheme designed to help first-time buyers and single-parent families own a home sooner by lowering the barrier to enter the property market and negating the requirement for mortgage insurance. The scheme is designed to help new buyers own a home sooner, with a deposit of as little as 5 per cent for first-time owners or 2 per cent for single-parent families.
Under the rules, the federal government guarantees the remaining 15 per cent needed to make up a typical home purchase deposit. It is among several policies launched this year by the government to address housing unaffordability.
As many as 4,651 unused guarantee credits from the 2020-21 financial year would be reissued. Access to the scheme for the more than 4,600 prospective new home buyers caught by pandemic disruption will be granted by reissuing unused credits.The scheme was already extended a year in the Federal Budget in May, one of several housing policies handed down to improve access to the housing market. 60,000 new owners had been included in federal assistance programs so far.
The government also increased the amount Australians could withdraw from their superannuation under the First Home Super Saver (FHSS) from $30,000 to $50,000.
Under the rules of the underwriting scheme, the federal government guarantees the remaining 15% of the 20% needed to make up a typical home purchase deposit. Queensland tops the states for homes taken up so far under the scheme in 2020 and 2021, with 696 purchases. NSW had 442 in the period, ahead of Victoria with 332 and Western Australia at 220.
South Australia had 110 homes taken up, ahead of double-digit figures in the ACT, Tasmania and the Northern Territory. With the First Home Loan Deposit Scheme and the Family Home Guarantee combined, more than 39,000 homes are covered. At a speech delivered on Thursday, Morrison pointed to the number of Australians who had received federal assistance to get into a home.
The recent release of the annual Trends & Insiders Report for 2020-2021 on the Home Guarantee Scheme shows that one in five first home-loan deposit places went to essential workers, including 34.8 per cent who were nurses. 58% of the grants were distributed to people under the age of 30.
In October, a statutory review of the operation of the National Housing Finance and Investment Corporation Act found the home loan guarantee scheme had brought forward existing demand rather than boosting it, by enabling people who could not otherwise buy property to get a foot on the housing ladder. First home buyer schemes from all governments always target purchasing power as this works politically – yet it is all but unanimous among economists that doing so adds momentum to the price rises of homes these people are trying to buy.
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