Housing Affordability – The budget announces the Home Guarantee Scheme
How will the budget benefit prospective home buyers?
Housing affordability: First home buyers, single parents and Aussies in regional areas will all receive more support to enter the housing market. There is an expansion of the Home Guarantee Scheme announced in this year’s budget.
With housing affordability expected to remain a key issue heading into the election. The government has increased the number of places available under the scheme. A total of 50,000 for the next three years in an effort to help Aussies buy their own home sooner.
The former First Home Loan Deposit Scheme has been rebranded to become the First Home Guarantee with 35,000 places available from next financial year, up from 10,000 currently.
As before, the scheme allows first home buyers to purchase a property with a deposit of as little as 5 per cent. But without having to pay lenders mortgage insurance.
Meanwhile, the new Regional Home Guarantee will include 10,000 places each year for eligible citizens and permanent residents in regional areas.
Like the First Home Guarantee, this scheme will support Aussies to purchase a home with a minimum deposit of 5 per cent. However, those who have previously purchased property will also be eligible. So, long as it has been at least five years since they last owned a home.
Finally, the Family Home Guarantee has been expanded to 5,000 places.
The scheme enables eligible single parents with one or more dependent children to buy a home with a deposit of as low as 2 per cent.
Supporting Aussies
As part of the budget, the government said that the Regional Home Guarantee and the Family Home. So, guarantee would continue through to 2025. While the first home guarantee will remain in place on an ongoing basis.
160,000 individuals had purchased their first home during the past year.
HomeBuilder, the First Home Super Saver Scheme and the Home Guarantee Scheme have helped make the dream of owning a home a reality. The revamped scheme was particularly targeted at those who are currently renting. It’s about Australians getting into homes.
Family Home Guarantees
The best way to support people who are renting a house is to help them buy a house. Ensuring that more renters can buy their own home and get the security of home ownership, this is one of the key focuses of this Budget. It is also one of the key pledges that has been delivered on since the last election. Nearly 60,000 Aussies have been supported in buying a home under the Home Guarantee Scheme according to the government.
Women have accounted for 52 per cent of the total guarantees issued. And single mothers have accounted for 85 per cent of Family Home Guarantees.
Real Estate Institute of Australia (REIA) president Hayden Groves described the government’s expansion of the Home Guarantee Scheme as a most welcome measure.
“Setting up Australians into home ownership is a critical measure at this stage of the Australia’s political and economic cycle and it is applauded by REIA,” he said.
The government said that the increase in guarantees would cost $8.6 million over four years from 2022-23. On the other hand, $138.7 million over seven years from 2026-27, then $20.5 million per year from 2033-34.
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