Will the LNP’s new scheme help me become a first-home buyer?

For the first time, I’ve found myself in a position to consider homeownership. “Consider” is still very much the operative word, but it’s a step up from “I’ll never break out of the rental market, here’s to a life of permanent frivolity”.

Buying my first home (which will probably be a small unit if I want to be close to the city) became less of a foreign concept after the Crisafulli government announced a new shared equity scheme as part of this week’s state budget.

A shared equity scheme essentially allows the government to chip in and help you buy a home, with the equity they own either paid back over the time you live in it, or when you sell.

The LNP’s shared equity scheme will only be available for 1000 people. Credit: Anna Kucera

Under Queensland’s Boost to Buy program, the government will contribute up to 30 per cent equity for a new build, or 25 per cent for an existing home, for properties worth up to $1 million, with a minimum 2 per cent deposit. Singles earning up to $150,000, or two adults with a combined income of $225,000, would be eligible to apply.

This is really aimed at helping those of us who don’t have the bank of mum, dad or benevolent benefactor to chip in for a house deposit, or a realistic way to save $100,000 in a meaningful timeframe, which is basically what I’d need to afford a deposit now in Brisbane.

“Queenslanders shouldn’t be locked out of buying a home because they don’t have the bank of mum and dad,” Premier David Crisafulli said on Tuesday.

The government has also extended the $30,000 grant for first homes and land under $750,000 until June 2026, and abolished stamp duty for first home buyers purchasing a new build.

While I meet the criteria for the Boost to Buy program, I’m not getting too excited that this alone will change my housing prospects. The scheme is only available for 1000 applicants, and even with the deposit sorted, there could still be a significant mortgage to manage.

Institute of Public Affairs chief economist Adam Creighton worries the 2 per cent deposit will drive up demand in an already stressed housing market, and says the budget hasn’t done enough to address the underlying drivers of the housing crisis.

“What all the evidence has shown for decades, whether it’s federal or state homeowner grants, or these new, modern lower deposit arrangements, is it just increases the buyer’s buying power,” Creighton says, adding that the more people have to spend, the higher prices will continue to climb.

He adds the low number of homes offered through the program shows the government understands the risk.

“This is just about politics. There’s something like 20,000 home sales a quarter in Queensland – that’s 80,000 a year,” he says.

“For a lucky 1000 people that get the scheme, it’s probably going to help them. But it doesn’t fix the fundamental problem of unaffordable housing.”

Real Estate Institute of Queensland chief executive Antonia Mercorella is more optimistic and says the scheme is a “positive way to accelerate the pathway to homeownership”.

“The first thing that’s really pleasing is that it’s available for properties up to a million dollars in value, whereas previously, it was set at $750,000,” she says.

The median price for a house in Brisbane is $1 million - that’s $200,000 for a 20 per cent deposit. This East Brisbane home sold for $2.3 million.

“We were concerned by that because we know that around the state, property prices have grown considerably. The median house price in Greater Brisbane is a little under $900,000 … and significantly higher in the Brisbane LGA.”

Buyers generally (but not always) need to provide a 20 per cent deposit. Without it, they face paying lenders mortgage insurance, which along with stamp duty can become prohibitively expensive.

Mercorella says the shared equity scheme, along with stamp duty concessions and first homeowner grants, makes a huge difference.

“You’ve got the helping hand of the government, taking an equity position of up to 30 per cent in the property, diminishing the actual size of the mortgage you’re having to service,” she says.

While she acknowledges the criticism, Mercorella says we can’t continue to expect people to break into the property market under the current conditions.

“Prices have grown so significantly in a way that’s outstripped growth, so it’s important we refine and redesign the framework that’s used to allow people to gain access to the property market.”

Creighton says zoning, immigration caps and accelerating supply are the levers that will have the greatest impact on the housing crisis.

“The fundamental political problem is that no government will let house prices go down,” he says.

I want to believe that this scheme will make a difference and deliver the house I never dreamed of, because homeownership in this country feels utterly ludicrous.

I’ll stay hopeful, but I don’t think I’ll hedge my future on the LNP’s scheme anytime soon.