INDUSTRY NEWSNationalReal Estate News

First Home Loan Deposit Scheme issues more than 4600 new guarantees

Aspiring first home buyers are being urged to secure their place in the First Home Loan Deposit Scheme (FHLDS) before Christmas, with the release of more than 4600 new guarantees. 

The scheme helps first home buyers and single parent families get into their own home sooner with a deposit of as little as 5 per cent or 2 per cent respectively.

Prime Minister Scott Morrison said the Government would reissue up to 4651 unused guarantees to first home buyers from the 2020-21 financial year who hadn’t had an opportunity to purchase their first home.

“The pandemic and lockdowns have interrupted the plans of many home buyers this year, so this is about ensuring we give thousands more families the opportunity they need,” the Prime Minister said. 

“We want to help Australians into their first home or a home that they’ve had built for them and their family, and with our support first home buyers are at their highest level in nearly 15 years.”

REIA President, Adrian Kelly said that the FHLDS had helped nearly 60,000 Australians into home ownership to date.

“With around 4600 places coming online in time for Christmas, I urge aspiring first time home owners to take action by calling their local agent or mortgage broker and securing their place in the scheme.

“This First Home Loan Deposit Scheme is particularly important in a rising market, especially for those who do not have access to the Bank of Mum and Dad.

“This reissued 4600 places can be used for either new or existing dwellings which suits the type of housing stock first home buyers generally prefer with caps that better suit current market conditions,” he said.

Mr Kelly said moving into an election year in 2022 it was critical that schemes which support home ownership over lifetime renting continued.

“Home ownership is a significant factor in Australians enjoying a happy and secure retirement, as well as contributing to the overall housing affordability picture,” he said. 

“Loan repayments for first home buyers usually sit under median rents within two to six years of purchasing a home depending on the location.”

According to the REIA’s latest Housing Affordability Report, the number of first home buyers decreased to 37,782, a fall of 12.6 per cent during the quarter and just 1 per cent more over the past 12 months.

“The number of first home buyers decreased over the September quarter in all states and territories. South Australia had the largest decrease of 21.6 per cent and the Australian Capital Territory had the smallest decrease of 0.7 per cent,” the report noted.

“This competition means the average loan size to first home buyers has increased to $459,256. This was an increase of 2 per cent over the quarter and an increase of 14 per cent over the past 12 months.

“This simply means that government programs like the First Home Loan Deposit Scheme and the First Home Super Saver Program need to be supported and expanded.”

The recent release of the annual Trends & Insiders Report for 2020-2021 on the scheme, revealed some interesting points, particularly in relation to women and young people. 

Some of the report’s key insights are:

  • One in five First Home Loan Deposit Scheme (FHLDS) guarantees issued went to essential workers, representing almost 6000 key workers who purchased their first home under the scheme, 34.8 per cent of which were nurses.
  • Fifty-two per cent of FHLDS guarantees went to women, with the market average only 41 per cent women.
  • Fifty-eight per cent of all buyers under the scheme were Australians aged under 30.
  • Homebuyers were able to bring their home purchases forward by an average of four years for the FHLDS, and 4.5 years for the New Home Guarantee.

First home buyers will be able to apply for these guarantees from the scheme’s panel lenders in the coming weeks.

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Nicole Madigan

Nicole Madigan is a freelance journalist for Elite Agent.