Scott Morrison to expand first-home buyers scheme

The federal government will expand its scheme that enables first-home buyers to get into the property market with a five per cent deposit.

Tens of thousands of young Australians will be helped to buy their first homes in a massive expansion of a government guarantee scheme that cuts the deposit required to just five per cent.

The Herald Sun can reveal Tuesday’s federal budget will more than double the Morrison government’s home ownership scheme, offering 50,000 places to those struggling to crack the hot property market.

This includes 35,000 places for first-home buyers wanting to buy new or existing homes worth up to $700,000 in Melbourne and Geelong, and $500,000 in the rest of Victoria.

By guaranteeing up to 15 per cent of these loans, the government allows buyers to avoid the upfront expense of lenders’ mortgage insurance worth tens of thousands of dollars.

Another 10,000 places will be aimed at those wanting to buy or build new homes in regional areas, matching a Labor election commitment unveiled over the weekend.

Treasurer Josh Frydenberg said the scheme had already helped ­almost 60,000 people – including 9700 Victorians – buy their first homes since the start of 2020.

“The Morrison government is helping to make home ownership a reality for thousands more Australians,” the Treasurer told the Herald Sun.

“In tomorrow night’s budget, we’re supporting even more aspiring homeowners to get into the market.”

Bridget Gardner bought a house using first home-buyers scheme. Picture: Nick Clayton

The 35,000 places for first-home buyers will be available from July 1, along with 5000 places for single parents trying to buy their first properties or re-enter the housing market. They can receive a guarantee with a deposit of just 2 per cent.

The regional scheme begins on October 1. Permanent migrants will be eligible, in a bid to incentivise them to move to regional areas, as well as anyone who has not owned a property for five years.

All three programs are available for singles earning up to $125,000 and couples earning a combined $200,000.

On Saturday, Labor leader Anthony Albanese unveiled the opposition’s regional first home buyer support scheme, with 10,000 places available and reserved for Australians who have lived in the area they want to buy in for at least 12 months.

The Morrison government will confirm the expansion in this week’s Budget.

A government review of existing support programs last year recommended targeting extra support to those in regional areas.

It found buyers had been helped to bring forward their purchases by an average of four years, with one in five guarantees issued to essential workers and 52 per cent handed to women.

In the year to January, 160,000 home loans were approved for first home buyers nationwide, compared to the five-year average of about 100,000.

“We want to help even more Australians into their first home or a home that they’ve built for their family, and with the government’s support first homebuyers are at their highest levels in 15 years,” Housing Minister Michael Sukkar said.