How will the budget benefit prospective home buyers?

By Jon Bragg

April 01 2022
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Tens of thousands of Aussies will be able to take advantage of the revamped Home Guarantee Scheme.

How will the budget benefit prospective home buyers?

First home buyers, single parents and Aussies in regional areas will all receive more support to enter the housing market under 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 to 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 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.

As part of the budget, the government said that the Regional Home Guarantee and the Family Home Guarantee would continue through to 2025, while the first home guarantee will remain in place on an ongoing basis.

Announcing the support in his budget speech on Tuesday, Treasurer Josh Frydenberg said that 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 home ownership a reality,” he said.

“Helping more Australians to own a home is part of our plan for a stronger future.”

Speaking to Nine’s Today Show, Prime Minister Scott Morrison said that the revamped scheme was particularly targeted at those who are currently renting.

“It's about Australians getting into homes. The best way to support people who are renting a house is to help them buy a house,” he said.

“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 and was one of the key pledges that I've 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 and $138.7 million over seven years from 2026-27, then $20.5 million per year from 2033-34.

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