Scott Morrison housing affordability: First home buyers’ incentives explained - Are you eligible?

More homebuyers now have a buffer from skyrocketing property values, to stop the spread of the housing affordability crisis. See how it affects you.

Desperate to prevent the spread of Australia’s housing affordability crisis across the regions, the Morrison Government has moved to place a buffer between out-of-city homebuyers and skyrocketing property values.

Lifestyle shifts due to the Covid pandemic led to massive growth in demand for regional homes, with tree and seachangers turbocharging annual home price growth of around 30 per cent across much of regional Australia in 2021.

It was a rate of growth that outpaced the metro areas for the first time.

But as fears grow of regional buyers being priced out of their own markets, the Federal Government has outlined moves to help vulnerable regional buyers via the 2022 federal budget.

Housing affordability has become an issue across the country. Picture: Phoenix Naman

The introduction of the Regional Home Guarantee will attempt to stem the housing affordability crisis gripping several regional hotpots in Australia, including Byron Bay, Sunshine Coast and Mornington Peninsula.

The introduction of the Regional Home Guarantee means homeseekers in regional areas are one of the big winners in terms of housing and real estate out of the federal budget.

Other big winners are first-home buyers and single parent families also looking to get into a home.

“The government is aware that housing prices are increasing in regional areas, as regional

centres become increasingly attractive and Australians are opting to move out of our major capital cities to the regions,” said Barnaby Joyce, Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development.

“The government is expanding the Home Guarantee Scheme to establish a Regional Home Guarantee, providing up to 10,000 places each financial year from 2022-23 to 2024-25 to support aspiring homebuyers in regional areas to purchase or construct a new home sooner.

“This will support regional homeownership and help ease the pressures by encouraging the provision of new housing developments.”

The federal government has increased incentives to first home buyers. Picture: NCA NewsWire / Jeremy Piper

The Home Guarantee Scheme, which has been expanded to 50,000 places allows buyers to stump for as little as a five per cent deposit for their home, with the government guaranteeing the rest.

Up to 35,000 places per year will be made available for eligible first-home buyers across Australia as part of the scheme and the family Home Guarantee will be increased to 5,000 places per year, to provide a supported pathway into homeownership for more single parents with dependants.

FEDERAL BUDGET HOMEBUYING INCENTIVES EXPLAINED*

First Home Guarantee

Formerly the First Home Loan Deposit Scheme, this is designed to support eligible first home buyers to build or purchase a first home sooner by providing a guarantee to participating lenders for up to 15 per cent of the property purchase price.

New Home Guarantee

Designed to support eligible first-home buyers seeking to build a new home or purchase a newly built home by providing a guarantee to participating lenders for up to 15 per cent of the property purchase price.

Massive house price growth has led to heightened affordability concerns. Pic: supplied.

Family Home Guarantee

The Family Home Guarantee is designed to support single parents with dependants seeking to enter, or re-enter, the housing market. The Family Home Guarantee will commence on 1 July 2021.

Rural Home Guarantee

Designed to support eligible citizens and permanent residents who have not owned a home for five years to purchase a new home in a regional location by providing a guarantee to participating lenders for up to 15 per cent.

*Source: 2022-23 Budget Paper No. 1

Originally published as Scott Morrison housing affordability: First home buyers’ incentives explained - Are you eligible?