Frontline COVID-19 workers ahead in loan scheme

Key workers on the COVID-19 frontline led the charge to take up the First Home Loan Deposit Scheme.

Rebecca Mercer and her partner used the scheme to buy. Picture: John Feder

Key workers on the COVID-19 frontline led the charge to take up the First Home Loan Deposit Scheme, with their comparative job security giving them an edge despite the economic uncertainty.

Teachers, nurses, police offic­ers, firefighters and other frontline workers were the biggest cohort (18 per cent) to access the 10,000 spots on offer in the initial round.

The federal government scheme, which started in January, enables first-home buyers to ­purchase a property with a deposit as low as 5 per cent.

The lenders mortgage insurance­ would then be guaranteed by the government. A strict set of income and buying caps were enforced to target low- to middle-income savers.

National Housing Finance and Investment Corporation chief Nathan Dal Bon said the timely introduction ahead of the global pandemic had helped sustain the property market in the face of job losses and downturn in business revenues.

“The scheme‘s eligibility criteria in terms of income ranges seems to fit very well with that moderate income range that key workers typically have,” Mr Dal Bon said. “Also, some of them are obviousl­y public sector workers so they have that stability of tenure, which is obviously important … in the current climate.”

Given weak wage growth in recent years lagging behind the rise in house prices, research from the Grattan Institute suggests the saving­ process now can take nine or 10 years.

Housing Institute Association chief economist Tim Reardon said without help into the market, many would not be able to buy given the post-banking royal commission’s conservative lending environment.

Primary school teacher Rebec­ca Mercer and her construction worker partner Robert Zarrino, both 26, had planned on buying at the end of the year but were able to secure their new apartment in Homebush, in Sydney’s west, after hearing about the scheme in May.

“We were living on a very threadbare budget while trying to save. Then we got the mortgage and it’s like, ‘holy crap, this is super affordable’,” Ms Mercer said.