This article is from the Australian Property Journal archive
THE government’s First Home Loan Deposit Scheme is supporting more first home buyers than ever before, with Queensland and WA seeing the strongest demand.
According to The National Housing Finance and Investment Corporation (NHFIC) third annual First Home Loan Deposit Scheme (FHLDS) Trends & Insights Report, most states have seen a higher proportion of guarantees in 2021-22 than in the initiative’s previous years.
Nationally, around one in seven first home buyers over the period were supported by the scheme, up from around one in 10 over 2020-21.
“The report demonstrates another year of strong demand for the Home Guarantee Scheme, with the Government’s significant expansion of the Scheme enabling more Australians to buy their own home sooner across the cities and regions,” said Nathan Dal Bon, CEO at NHFIC.
The FHLDS includes the government’s New Home Guarantee (NHG) and Family Home Guarantee (FHG), which were brought under the new Home Guarantee Scheme (HGS) in July.
Relative to population share, Queensland and WA have been most represented by the scheme, with QLD having the highest concentration of guarantees.
Approximately 29% of all FHLDS guarantee recipients reside in the Sunshine State, as well as 37% of all FHG recipients, compared to the state’s 20% population share.
Likewise, WA received 22% of all NHG guarantees and around 17% of all FHG guarantees, way up on its 11% population share.
27% of guarantees over 2021-22 were issued to key workers, compared to 23% in 2020-21 and 20% in 2019-20.
Around 57% of these key workers were teachers and nurses, with social workers accounting for 17% and aged and disabled carers for 9%.
Typically, home buyers who were supported by the scheme purchased houses with at least three-bedrooms, at around 19,000 purchased homes or 70%.
47% of homes purchased were over 25 years old and were on average 18% cheaper than newly constructed dwelling purchased under the scheme during the same period.
“The proportion of first home buyers supported has increased from 1 in 10 to 1 in 7, demonstrating the maturity of the Scheme in supporting first home buyers overcome the deposit hurdle to enter the housing market,” said Hugh Hartigan, head of research at NHFIC.
“An interesting aspect of the report is that nearly half of all first home buyers typically purchased properties that were more than 25 years old, suggesting these types of properties provide a good entry point into the market for first home buyers.”
The reported successes of the scheme were welcomed by REIA, with president Hayden Groves noting that despite decreasing housing and rental affordability the initiatives are working.
“Since May, repayments on a $500,000 mortgage have increased by almost $700 each month and household saving is forecast to slump below pre-pandemic levels,” said Groves.
“Nevertheless, the Scheme is doing its job. It is great that nearly 1400 recipients have transitioned out of the scheme into conventional loans and more than 40,000 Scheme recipients, are ahead of their repayments. Only fifteen guarantees were 60+ day in arrears which is less than 0.04% of all settled loans to date.”
The scheme’s capacity has also been extensively expanded, with 50,000 places available in the First Home Guarantee (FHBG), FHG and the new Regional First Home Buyer Guarantee (RFHBG).
“We welcome the new and existing initiatives that will support more Australians achieve their first home ownership dream, other factors need to be addressed such as housing supply and stamp duty,” concluded Groves.
