Changes to the federal government’s $1.2 billion First Home Saver Account (FHSA) have boosted the scheme after an underwhelming response during the first two years of its operation.
Loan Market chief operating officer Dean Rushton said the FHSA, which was launched in October 2008, was well intentioned with an original target of assisting 700,000 people in its first four years of operation.
Mr Rushton said the latest figures from the Australian Prudential Regulation Authority (APRA) showed that as of June 2011, 31,000 FHSA accounts had been opened nationwide containing a total of $230 million.
“This is a 56 per cent improvement on March 2011, and an even more impressive 95 per cent rise from September, 2010,” he said.
Mr Rushton said the scheme had attracted more than 6,000 account holders in the first six months of 2011.
He said the recent changes drafted by Treasury in late September 2011, will increase consumer confidence in the scheme, with the periodic release of statements and information not previously communicated.
“We believe further improvements to the scheme to make it more flexible that were passed by federal parliament earlier this year are helping to boost interest in FHSA,” Mr Rushton said.
“This is a great incentive to assist people trying to save a home loan deposit, with generous rewards on offer from the government.”
Under the FHSA, the government contributes 17 per cent on the first $5500 of individual contributions made each year. Account holders are required to keep savings in the FHSA for four financial years before they can use the funds to buy a home.
FHSA account holders were required to pay the money into their superannuation but the changes approved by parliament allowed for the savings to be paid into an approved mortgage after the end of the qualifying period.