The 1 July release of 10,000 new guarantees under the First Home Loan Deposit Scheme is expected to be well received for those looking to enter the market.
The HIA says it is anticipating a positive response to the new allocation, with many first home buyers hoping to take up the offer and move their home-buying plans along in a faster fashion.
“The First Home Loan Deposit Scheme recognises the importance of making the pathway to home ownership reasonable and timely for first home buyers,” said HIA’s chief executive industry policy, Kristin .
“Buying a first home is the beginning for many in settling into a good financial routine and building a lifetime in a place they already love or will grow to love.
“The deposit gap remains the largest impediment for most people in accessing a home loan and starting their home ownership story. Recognising that many people have the capacity to meet regular loan repayments but are struggling to save the ‘extra’ needed to make a 15 per cent deposit is the key to this scheme.”
Ms Brookfield said the take-up of the first tranche of 10,000 places over the last six months has proven that the scheme meets a real need.
“It proves that there are many people willing and able to buy a home, but the financial rules and tighter lending critieria have been in their way,” she said.
“While people aged under 35 make up the lion’s share of the guarantees, over 20 per cent of the first tranche were provided to people over 35, with 11 per cent aged over 40.
“It’s also interesting to see that more than half of the applicants were singles, and earned on average just over $60,000 a year, which is well below the income cap of $125,000.
“The homes bought are also below the maximum price thresholds for each region, which suggests there are houses available to first home buyers in every state and territory.”
This, coupled with recent developments in the property market, is set to drive the home ownership dream further for many Australians, according to Ms Brookfield.
“With the existing first home owner grants available for new homes, stamp duty exemptions in most states and territories, the HomeBuilder grant and the guarantees under this scheme, first home buyers are well placed to achieve their home ownership dream,” she said.
“The additional state grants available in Tasmania, Western Australia and the Northern Territory also provide an even greater incentive to act.”
Ms Brookfield’s comments come after Rate City highlighted the pros and cons of the scheme, including a concern that buyers will be facing hidden costs and will end up paying more in the long run.