Banks have started accepting loan applications for the 10,000 extra First Home Loan Deposit Scheme places announced on Federal Budget Day.
The eligibility criteria for the scheme has changed; the slots are for new homes only, with price caps raised and a deadline of June 30, 2021.
“The emphasis on new builds and an increase on the price caps for new homes means that it has never been a better time for Australians to think about building or buying a newly built home,” said Kristin Brookfield, Chief Executive of Industry Policy for the Housing Industry Association.
“Today’s announcement that banks are now open for business and accepting applications is great news.
“The time it takes to save a deposit is always a challenge for first home buyers, but today more than ever, combining this with tougher lending restrictions had meant first home buyers have been waiting years to achieve their home ownership dream.
“Increasing the number of applicants able to access the scheme will not only help to boost the economy, but will clearly help lower and middle income workers move into a home of their own much sooner.”
Last month, REIA boss Adrian Kelly said the new rules ignored the reality of the market, noting that only 20 per cent of first home buyers will purchase or build a new house.
“In general, first home buyers’ property choices are based on affordability of older dwellings in locations that provide proximity to work, leisure activities and infrastructure including public transport,” he noted.
The scheme, while intended as a shot in the arm for the building sector, ignores the fact that sellers of older homes to potential first-home buyers are likely to then build their own home – creating jobs for the building sector regardless.
“The multiplier and employment effects are probably greater than when a first home buyer purchases a new house, as the size and cost of construction of dwellings purchased by upgraders is generally more than that of first home buyers,” Mr Kelly explained.