Invest
Government raises price caps for Home Guarantee Scheme
Home buyers will now be supported in purchasing a home valued at up to $900,000.
Government raises price caps for Home Guarantee Scheme
Home buyers will now be supported in purchasing a home valued at up to $900,000.
The federal government has bumped up the price caps for properties that can be purchased under the Home Guarantee Scheme by up to $250,000.
The scheme enables home buyers to purchase a property with a deposit of as little as 5 per cent without having to pay lenders mortgage insurance.
“Saving to buy a house has always been hard work and we know as prices have increased, it’s been getting harder,” said Prime Minister Scott Morrison.
“That’s why these higher price caps will help more people realise their dreams and lock in a stronger future for themselves.”
In Sydney, the price cap will be increased from $800,000 currently to $900,000 next financial year, while in Melbourne the cap will be raised from $700,000 to $800,000.
Canberra will see the biggest increase of $250,000 for a maximum purchase price of $750,000 and in Brisbane the cap will be raised by $100,000 to $700,000
Additionally, the caps for Perth, Adelaide, Hobart and Darwin will all be increased by $100,000 to a maximum purchase price of $600,000.
These new price caps will also apply to regional centres in each state with populations of over 250,000 including Newcastle and Lake Macquarie, the Illawarra, Geelong, the Gold Coast and the Sunshine Coast.
“We acknowledge how hard it can be to buy a new home or re-enter the housing market and that saving a deposit is the hardest part of getting into home ownership,” said Assistant Treasurer and Minister for Housing Michael Sukkar.
“By adjusting the price caps for the Home Guarantee Scheme, we are ensuring Australians have more options when buying a home.”
Increased price caps will also be introduced for other parts of each state as follows:
- NSW: From $600,000 (2021-2022) to $750,000 (2022-2023)
- Victoria: From $500,000 (2021-2022) to $650,000 (2022-2023)
- Queensland: From $450,000 (2021-2022) to $550,000 (2022-2023)
- Western Australia: From $400,000 (2021-2022) to $500,000 (2022-2023)
- South Australia: From $350,000 (2021-2022) to $450,000 (2022-2023)
- Tasmania: From $400,000 (2021-2022) to $450,000 (2022-2023)
The increases come after the expansion of the Home Guarantee Scheme in the budget last month to a total of 50,000 places for first home buyers, single parents and regional Australians each year over the next three years.
Property Council of Australia chief executive Ken Morrison warmly welcomed the government’s changes.
“Bridging the deposit gap is a key challenge for aspiring home owners and the Home Guarantee Scheme has been a well-designed program which has helped eligible home buyers get into the market,” he said.
“Given the extent of house price increases in recent years, it makes sense to lift the scheme’s house price caps and we welcome this decision.”
Recent research from the Property Council revealed that nearly 90 per cent of people trying to enter the market believe that housing affordability will be one of the most important issues in determining their vote this election.
60,000 Aussies have been supported in buying a home to date through the Home Guarantee Scheme according to the Coalition.
“As a government, we fundamentally believe in the aspiration of home ownership with people being able to build a place of their own and invest in their future,” Mr Sukkar said.
“We know the importance home ownership brings, which is why we are expanding our extraordinarily successful Home Guarantee Scheme.”
The government also confirmed that 41% of scheme-backed loans were ahead of their pay back schedule.
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