How Aussies earning as little as $27k a year are buying homes

Aussies earning as little as $27,000 a year are making their property dreams come true.

Single mums, essential service workers and other Australians earning as little as $27,000 a year have been making their property dreams come true through a new scheme.

The NSW shared equity scheme allows home purchasers to get into the market with a deposit as low as 2 per cent, with the government contributing up to 40 per cent of the purchase price for an equivalent interest in the home.

Single mum Kellie Gawler is among those who have accessed the scheme and said she had never thought she would own a home for her and daughter Georgie.

“Georgie always said ‘mum and I are going to have a home one day’ and sure enough we have,” Ms Gawler said.

Ms Gawler said she was proud to become a homeowner through the scheme. Picture: Bethany Clare Photography

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She and Georgie, 11, moved into their two bedroom unit in Corowa in June.

“I never dreamt I’d be in this position,” Ms Gawler, who works as a store manager for BWS, said.

“Trying to pay rent and bills, the thought of having to save around $50K for a deposit was just crazy. The money I am saving by not travelling 80km a day to a rental is paying off a home loan.”

Bendigo Bank is one of two lenders who run the Shared Equity Home Buyer Helper Scheme in NSW along with Unity Bank. Under the scheme, Bendigo has recorded 294 settlements since January 2023 with 349 approved to find a home.

High interest rates, property prices across NSW and low stock are making it hard for people to enter the property market. Picture: Monique Harmer

For those eligible, the government contributes up to 40 per cent of the purchase price for new home and 30 per cent on existing homes in exchange for an equivalent interest in the property.

This drastically reduces both the deposit – to as low as two per cent – along with mortgage repayments.

Bendigo’s data reveals the average salary for a single application was $63,766, while the average salaries for a couple’s application was $47,860 and $27,252.

Bendigo says the average age of people taking up the scheme is early 30s while top participating suburbs include Penrith, Liverpool, Gosford, Kingswood, Arncliffe and Coffs Harbour.

“We know shared equity schemes aren’t for everyone, but with higher property prices presenting challenges for many Australians trying to save a deposit, we’re seeing more customers turn to shared equity as an alternative,” Bendigo’s chief customer officer of consumer banking Richard Fennell said.

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Bendigo’s chief customer officer of consumer banking Richard Fennell.

“In many cases, shared equity schemes have allowed our customers to realise their dream of home ownership years before they would have been able to make it a reality.”

For Ms Gawler, the scheme was a welcome relief and came about after her dad stumbled across it on social media.

“My dad actually found it on Facebook and I decided to give it a crack,” she said.

“I only wish it was around years ago. I am feeling very proud I have accomplished such an enormous achievement. I thought I would never in my wildest dreams own my own home.”

SQM Research general manager Louis Christopher said shared equity schemes had been around since the early 2000s and hadn’t been overly popular.

Mr Christopher said there were drawbacks people needed to be aware of.

“When you buy a home as a first homebuyer, you are creating capital which can be used to upgrade at a later point in your life,” he said.

SQM Managing Director Louis Christopher.

REINSW CEO Tim McKibbin.

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“The issue with shared equity schemes is that a lot of that capital built up goes to the other shareholder, in this case the government.

“It means that the capital you’ve got to upgrade later in life will not be as large … your purchasing power is otherwise not as strong as what it would be.”

Mr Christopher said depending on the scheme, people in the past have had issues when it comes to renovations.

“Who is going to pay and what sign off do you need for that improvement?” he said.

“I’ve seen shared equity schemes where they don’t allow improvements or they have to be fully paid for by the occupier. You need to be careful and read the fine print.”

He acknowledged shared equity schemes help many people get into the market.

“If this is the only way to buy your first home – and it’s the only way it’s going to work – then fine, do it,” he said.

Mr Christopher acknowledged that if people need the scheme, they should take it up but be wary of the fine print.

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“It’s better than not having a home and I acknowledge … but it does come with a catch.”

Real Estate Institute of NSW chief executive officer Tim McKibbin said the institute supported any “initiate that puts people into homes”.

“However I think that what’s happening here is that we are trying to solve a supply problem by increasing demand,” he said.

Mr McKibbin said this type of scheme will increase competition for homes.

“With the shared equity scheme, more people who would not usually have the capacity to compete for the property will now be able to,” he said.

“So instead of having five people you are now going to have 10. What the government is doing is trying to solve a supply problem by empowering people which will only increase demand and that is likely to push prices up.”

He said the only way to solve the housing issue is to “simply build more homes”.

“I like the idea of shared equity schemes to give people the ability to get into the market but unless there are properties to buy, it’s not going to be much value,” he said. “It’s just going to make competition for the available properties stronger.”

Unity Bank is also a strong supporter of the scheme, with the bank’s chief executive Danny Pavisic saying it opened opportunities to home ownership to many more people.

“With cost of living pressures mounting, it also offers a timely way for eligible home buyers to reduce the amount of home loan required to complete their home purchase, with this flowing through to lower ongoing loan repayment and interest costs,” he said.

“We have been in the Shared Equity Home Buyer Helper programme for just over two

months now and are delighted that we have had hundreds of inquiries, with many of these

already on the path to home ownership.”