‘Game changer’: How Matthew bought a home without the bank of mum and dad

Matthew Armstrong and his wife Mandy Warren reached their 30s, and with no help from the bank of mum and dad, they realised it could take years to save a deposit on a Sydney home.

They had been renting a unit in Strathfield but then managed to take advantage of the federal government’s first home buyer help to purchase a townhouse in Kingswood.

Matthew Armstrong purchased a townhouse in Sydney’s Kingswood through the First Home Guarantee scheme.Credit: Steven Siewert

“We thought we’d probably have to save for another three to five years to get over that 20 per cent deposit hurdle,” Armstrong, a network engineer, said. Instead, they used the First Home Guarantee scheme, which waives lender’s mortgage insurance for buyers with a five per cent deposit.

“The scheme was a game changer. We would have had to wait years to get on to the property ladder, and likely in the same area, out west.”

First home buyers will soon have the option of the low-deposit scheme or the Help to Buy shared equity scheme. Expanded in this week’s budget, and set to start this year, Help to Buy will allow first home buyers to save only a 2 per cent deposit, while the government co-purchases up to 40 per cent of the property.

Armstrong was unsure if he would have chosen the shared equity model given the choice. But he knew to buy they would have to consider more affordable areas in western Sydney or the Central Coast – then was surprised at just how far they would have to go.

Armstrong purchased with his wife Mandy Warren and said the scheme was a game changer.Credit: Steven Siewert

“We thought anywhere west of Blacktown, but while there were units in our price range, we wanted a house with a backyard and garage,” Armstrong said.

“For a townhouse, we knew we’d have to go to St Marys, Mt Druitt or further west.”

Armstrong said the scheme fit like a puzzle piece. “One day we’ll be able to find a nicer place simply because we were able to get on to the property ladder.”

With first home buyers like Armstrong limited in what they can afford in Sydney, Domain’s chief of research and economics Dr Nicola Powell was pleased to see an increase in the property price caps for Help to Buy. Sydney buyers can now look at properties worth up to $1.3 million, albeit not on the bare minimum deposit.

“That’s one angle that needed to be targeted better to meet the current pricing we’ve seen across our capital cities and regional markets,” she said.

Buyers could afford to buy the typical house in parts of Sydney’s west, southwest, Canterbury/Bankstown region or Central Coast, on Domain data, or a unit in pockets of the north shore, northern beaches, inner west, city and east.

Powell said it’s difficult to determine whether the scheme will be a success.

“The feedback from similar shared equity government schemes abroad is that it’s helping first home buyers that are already close to purchasing a home,” she said.

Powell said she’s cautious about co-purchasing with the government, which will reap a share of benefits if prices rise.

University of Sydney urban and regional planning professor Nicole Gurran said Help to Buy could extend eligibility to key workers. “It targets moderate income earners who currently face years and years of saving for a deposit, or would only be able to afford a very entrance-level property.”

Gurran said this week’s boost to property price caps and income thresholds – $100,000 for a single, $160,000 for a couple – could be down to low applications for the First Home Guarantee scheme. Housing Australia data revealed first-home buyer participation fell 33 per cent from 2020-21 to 2023-24.

“Affordability is still going to be a serious struggle in terms of paying off high mortgages. I suspect they’ve expanded the thresholds due to insufficient take-up,” Gurran said.

Gurran said it’s too early to tell whether the 10,000 places per year will make a significant impact.

“ It’s too small to fundamentally alter the trajectory of home ownership for those who have been shut out of the market.”

Armstrong and Warren were recommended to MortgageWorks director Anthony Roddy, whose employee Lewis Wigington has assisted many buyers with the scheme.

Wigington said while the First Home Guarantee helps some buyers, the lower $900,000 property price cap in an expensive city like Sydney doesn’t offer great choice.

“In most suburbs, you might just get a one-bedroom apartment,” he said. “So if there’s anything listed above that, we’re seeing many issues. People are back to square one.”

Lewis said some buyers have moved to Queensland, where the scheme’s property price cap is $700,000 but affordability is better.

ANZ economist Madeline Dunk said ongoing affordability issues may cause some first home buyers to jump at the opportunity.

“They might not want to co-own with the government, but I think given how challenging affordability is, many will jump at the chance.”