FHLDS is ‘public policy at its best’

By Juliet Helmke 12 October 2021 | 1 minute read

The federal government’s First Home Loan Deposit Scheme (FHLDS) and New Home Guarantee (NHG) measures appear to be hitting the mark, according to the Real Estate Institute of Australia (REIA).


The figures notably revealed that the gender split of recipients granted places in the schemes has been generally even; news that REIA said showed the program was working.

REIA president Adrian Kelly said that the recent report into the schemes’ progress indicated that the measures were helping more Australians get into the property market without pouring fuel onto an already heated marketplace.

“This is public policy at its best at a time when supply and affordability is so challenging – providing a guarantee, not cash in hand, and putting the onus on the purchaser to meet their loan repayments,” Mr Kelly said.

Since January 2020, the two schemes – both of which allow eligible first-home buyers to purchase a property with a deposit of as little as 5 per cent – have enabled the purchase of 22,879 homes and made up for $1.4 billion in funds necessary for a deposit. 


Mr Kelly noted that first home buyers had shown a willingness to invest in a wide range of areas, and the schemes hadn’t necessarily contracted competition for homes in the tightest markets. In Sydney, for example, two-thirds of recipients bought at least 30 kilometres away from the city’s centre.

“You also have those great regional centres like Toowoomba benefiting, with nearly 100 recipients buying their first homes as part of the scheme there,” Mr Kelly commented.

While more than half of the buyers were under 30, he said the programs had also enabled nearly 300 Australians over 50 to own their own home and assisted a large proportion of workers in essential industries.

“It’s great to see that 6,000 key workers have been supported into home ownership since the start of 2020, a fitting use of Federal policy for our workers who have been crucial in the COVID-19 frontline response, including childcare workers, teachers, nurses and first responders.”

And REIA noted that in FY21, a large percentage of guarantees had gone to home hunters earning significantly less than the income threshold of $125,000 annually  more than a third of all places were taken by single applicants earning below $80,000 per year.

But with the figures also showing that 80 per cent of FY22’s First Home Loan Deposit Scheme places were already filled for the year, Mr Kelly commented that capacity might be one area the program could improve on.

“We’d always like to see more places on offer, particularly for established dwellings to make better use of our existing housing stock, as economic stimulus from the COVID-19 pandemic is reduced.”

The REIA’s commentary coincides with the revelation that Victoria has implemented its own scheme for property ownership – a $500M home buyer fund that enables access to property ownership for buyers with a deposit as little as 3.5 per cent of the property purchase price, with the government contributing up to 35 per cent of the purchase price in return for an equity share. 

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FHLDS is ‘public policy at its best’
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