The Coalition’s First Home Loan Deposit Scheme is being viewed as controversial by some, even dangerous by others. From a mortgage broker’s perspective, I don’t think either is necessarily true.
The promise to help 10,000 first home buyers into the market by topping up their 5 per cent deposits with a government guarantee for 15 per cent of the loan should be viewed as a positive for those trying to enter a tough arena.
And I don’t believe it will have a marked impact on property prices in general.
Saving a deposit is one of the biggest hurdles for young people, as housing costs for many have become simply unaffordable.
Home ownership is falling fast in Australia: less than half of people aged 25–34 own their home today, and almost half of retirees will be renters in 40 years’ time.
So, taking the lender’s mortgage insurance (LMI) out of the equation could certainly help these people get a kick-start in the market — it could really be a game-changer.
I believe there are two key takeouts from the promised scheme, with PerthPerth, TAS Perth, WA prices used as examples.
There is even an option to use the First Home Super Saver Scheme to help first home buyers use their super fund as a savings plan and take the 15 per cent tax discount.
Robert Perks is the managing director of Perth-based Fifth Avenue Finance Group.
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