Home Guarantee Scheme a hit with NSW, Queensland first home buyers

Around 100,000 first home buyers have used the federal government’s low deposit scheme since the last election, with more than half in NSW and Queensland.

The Home Guarantee Scheme (HGS) has helped over 100,000 people into home ownership with a deposit as low as two or five per cent since the last federal election.

More than half of all first home buyers taking advantage of the federal government’s low-deposit scheme to enter the market are settling down in NSW and Queensland, new figures from Housing Australia show.

The Home Guarantee Scheme (HGS) has helped over 100,000 people into home ownership with a deposit as low as two or five per cent since the last federal election.

Around 27,000 first home purchases in both NSW and Queensland since May 2022 were assisted by the scheme, with thousands of buyers in Ipswich (3,553) and Logan (2,991), south west of Brisbane, getting into the market.

But the regions with the highest take-up were in Melbourne’s west (4,736) and south east (3,905). The city - which is still yet to fully recover from the pandemic hit to confidence - last year failed to experience the same property price gains felt around much of the country. PropTrack’s affordability indicators show first homebuyer activity has been strong in the city for sometime due to more affordable new developments being built.

More than 13,180 took advantage of the support in Western Australia. Appetite for the scheme was particularly strong in Perth, where property prices continue to boom through a period of undersupply and relative affordability.

Last financial year, a third of first of all first-home buyers used the scheme as a leg-up into the market, up from one in seven the year prior.

The first iteration of the guarantee was first introduced by the Morrison government in 2020 to help 10,000 first-time buyers each financial year purchase a modest home with a deposit as low as 5 per cent and avoid paying lenders mortgage insurance (LMI).

It was expanded by the Albanese government in 2022 to offer thousands more available spaces and to include the Regional First Home Guarantee and the Single Parent Guarantee, the latter of which allowed for a deposit as low as 2 per cent. The definition of couple was also expanded from married or de facto to include siblings and friends, while non first home buyers who haven’t owned a property in Australia in the last ten years were also allowed to apply.

Federal Minister for Housing Julie Collins said the government is helping more Australians move into their own home.

“The expanded Home Guarantee Scheme has already helped 100,000 people into home ownership and, along with Help to Buy, will help thousands more,” she said.

“Our ambitious housing reform agenda is working across the board – more help for homebuyers, more help for renters and more help for Australians needing a safe place for the night.”

The Albanese Government’s Help to Buy shared equity scheme, set to be brought in this year and will operate separately from the HGS, is designed to support 40,000 Australians into homeownership by taking a 30 to 40 per cent stake in their purchase.