NT Treasurer calls for increase to 5 per cent home deposit limits

NT Treasurer Bill Yan says the $600k cap on the new 5 per cent home deposit scheme is too low for Darwin first home buyers given the city’s rapidly rising house prices.

The Northern Territory government is calling on the Commonwealth to increase the price cap set for first home buyers under the new low-deposit home loan scheme, warning Darwinites are being locked out of the scheme.

Under Labor’s housing reform, first home buyers in the Territory are now eligible to purchase a property with just a five per cent deposit – but only for homes up to $600,000.

Treasurer Bill Yan wants that cap raised to $850,000, saying the cap failed to reflect the reality of the NT housing market and Darwin’s rising house prices.

“This is a senseless, one-size-fits-all policy that locks out young Territorians who’ve worked hard, saved up, and are ready to own a home,” Mr Yan said.

“Darwin is a capital city with growing property prices, and yet we’ve been lumped in with caps similar to regional Tasmania and Norfolk Island. It’s completely out of touch.”

Treasurer Bill Yan is calling for the Home Guarantee Scheme cap to be raised from $600k to $850k in the NT. Picture: Pema Tamang Pakhrin

According to the latest Cotality data, Darwin is leading the nation for the rate of capital city house price growth – with median prices currently sitting at $667,313 for homes and $402,720 for units.

Outside of Darwin the median NT house price is $424,604.

Mr Yan urged local federal representatives to demand action from their Canberra colleagues.

“With a simple change to the policy, and just a few strokes of the pen, Labor could lift the cap and unlock home ownership for more young Territorians, especially those wanting to start families,” he said.

“If Luke Gosling truly understands the needs of his community, he should be the first to call for an urgent change to this threshold.”

Luke Gosling MP said the $600k cap captured most first-home buyers. Picture: Pema Tamang Pakhrin

Member for Solomon Mr Gosling said the $600,000 cap reflected local conditions without adding to inflationary pressures.

“The scheme is helping people who would otherwise be locked out of the market by deposit requirements,” he said.

“More than half of the available houses and units and most first-home buyers are covered.

“The federal Labor government has already helped 1187 people in Darwin and Palmerston move into homes under the expanded Home Guarantee Scheme. Each of those first home buyers has moved into a home under the $600,000 cap.”

Mr Gosling said if there was evidence the $600,000 cap was not helping first home buyers enter the Darwin housing market, he would advocate for a review.

The Home Guarantee Scheme is a federal guarantee enabling first homebuyers to purchase a home using a deposit of 5 per cent without paying Lenders Mortgage Insurance.

On October 1 the scheme expanded to include all first home buyers – removing income caps and limits on places.

Housing Industry Australia NT said it was a good thing to give everyone the chance to own their own home, but expressed concerns the scheme could push people into making a purchase without the means to make loan repayments.

“At the end of the day it’s all about getting people into new homes – people that otherwise might not be able to afford their own home” regional executive director Luis Espinoza said.

Mr Espinoza said he would support raising the $600,000, but that it was important not to motivate buyers into homes out of their price range.

“That’s where people need to do their homework, just because people have access to the five per cent deposit, they need to look at their finances and look at what they can and can’t afford,” he said.