Responses to increased costs of living were a key thematic in the 2023 budget, with housing affordability being no exception.
As part of the federal budget handed down this evening, the government said it would double spots under the home guarantee scheme to 50,000 places per year and tip an extra $2 billion into affordable housing initiatives.
It formed part of several expansions to the federal government’s existing home buyer schemes designed to help individuals to buy their first property sooner.
First introduced in January 2020, the home guarantee scheme allowed first home buyers to buy a property with a 5 per cent deposit.
That’s much lower than the 20 per cent deposit required by most lenders to avoid paying mortgage insurance.
Treasurer Josh Frydenberg this evening said the federal government would contribute $8.6 million to expand the scheme further to 50,000 places per year.
“Home ownership is fundamental to the Coalition,” Mr Frydenberg said during the budget announcement.
“HomeBuilder, the First Home Super Saver Scheme and the Home Guarantee Scheme have helped make the dream of home ownership a reality.”
Under the expanded schemes, up to 35,000 places per year will be available under the first home guarantee (formerly the first home loan deposit scheme) from 1 July this year.
He estimated that 160,000 people purchased their first home over the last year and that the scheme had helped nearly 60,000 people buy a property.
Also included in the budget was a new regional home guarantee aimed at assisting aspiring homeowners in regional areas. Up to 10,000 places will be available under the scheme, which is also open to non-first home buyers.
The family home guarantee, targeting single parents, was also increased to 5,000 places per year.
Another $2 billion was allocated to increasing the National Housing Finance and Investment Corporation’s liability cap to $5.5 billion.
It is expected to support some 10,000 new affordable dwellings.
Property Investment Professionals of Australia chair Nicola McDougall commented on the expanded schemes.
“The doubling of the Federal Government’s various home guarantee schemes will assist some 50,000 people annually, many of whom may have struggled to achieve home ownership without it,” Ms McDougall said.
“It’s especially pleasing to see the Family Home Guarantee for single parents expanded to 5000 places every year until 2025 because these are the buyers who need assistance the most.
“With rental markets critically undersupplied around the nation, helping single parents make the usually difficult transition from being a tenant to a homeowner will make a significant difference to their lives as well as to the lives of their children.”
