Federal election 2022: PM offers leg-up for first-time buyers
The government has raised the price caps for its home loan guarantee scheme.
The government has significantly raised the price caps for its home loan guarantee scheme aimed at helping first-time, regional and single-parent buyers deal with the affordability crisis.
The new caps will come into effect on July 1, with the largest increases for regional areas that have experienced the sharpest falls in affordability.
For example, the home loan guarantee scheme will be available for eligible applicants to buy Canberra properties valued up to $750,000, from the current $500,000.
In Sydney and major NSW regional centres – including Newcastle and Wollongong – the price cap will be lifted from $800,000 to $900,000, and by $150,000 to $750,000 across the rest of the state.
For comparison, the median dwelling value in Newcastle and Lake Macquarie is $870,000, according to CoreLogic, and $1.1m in Sydney.
With housing affordability yet to become a major election campaign issue, Scott Morrison said the home guarantee scheme, which helps would-be property owners buy a with deposits of as little as 2 per cent, had already helped 60,000 Australians break into the hot property market. “Saving to buy a house has always been hard work and we know as prices have increased it’s been getting harder,” the Prime Minister said. “That’s why these higher price caps will help more people realise their dreams and lock in a stronger future for themselves.”
The budget expanded the annual number of places in the government’s home guarantee scheme to 50,000, including 10,000 guarantees each year from October 1 to June 30, 2025 to help residents of regional Australia – including non-first home buyers – to buy or build a new home.
By providing a taxpayer-backed guarantee of as much as 18 per cent of the value of the property for single parents, and 15 per cent for first-home and regional buyers, the scheme helps would-be property owners to get a loan and avoid the need to pay thousands of dollars in lenders mortgage insurance.
“We’re building a stronger future for Australians by making home ownership easier by making more properties eligible for the scheme and expanding it to 50,000 places each year,” Mr Morrison said.
Regional home prices jumped 25 per cent over the year to March, according to CoreLogic, far outstripping the 16 per cent rise across the capital. Values have surged 27-28 per cent in regional NSW and Tasmania.
The home loan guarantee scheme’s price cap for properties in Melbourne and major Victorian regional centres will lift from $700,000 to $800,000, and from $500,000 to $650,000 across the rest of the state.
In Brisbane and major Queensland towns, the cap climbs $100,000 to $700,000, and $100,000 to $550,000 across the rest of the Sunshine State.
Housing Minister Michael Sukkar said “the new price caps for regional areas will ensure that the supply of new builds in regional Australia is supported, helping ease supply constraints that are being felt outside of the major cities”.
“The adjusted caps will also assist in accommodating larger families under the Family Home Guarantee.”
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