The Morrison government is shoring up its schemes to improve housing affordability ahead of the federal election.
Another 4,600 places will be offered to first home buyers looking to take advantage of the federal government’s New Home Guarantee scheme.
Speaking at a joint press conference with Prime Minister Scott Morrison earlier this week, federal Housing Minister Michael Sukkar announced the extension and talked up the impact of the scheme.
“That program, since we announced it at the election and put it in place at the beginning of last year, has seen some 60,000 Australians bid or building their first home with as little as 5 per cent,” he said.
Previously known as the First Home Loan Deposit Scheme, the New Home Guarantee was rebranded and expanded to accommodate another 10,000 applicants earlier this year.
The scheme allows first home buyers to buy or build their first home with a deposit of as little as 5 per cent rather than a traditional 20 per cent, with the federal government guaranteeing up to 15 per cent.
All told, Mr Sukkar said that the federal government’s New Home Guarantee, HomeBuilder and the First Home Super Saver Scheme had helped around 300,000 Australians buy their first home.
“The Morrison government will continue to provide Australians who have that aspiration to go and buy a home, the opportunity to go and achieve that,” he said.
This latest bolstering of the scheme echoes a similar move made by the federal government back in February, where 1,800 unused guarantees from the previous financial year were reissued.
Data published by the Commonwealth Bank of Australia (CBA) earlier this year suggested that schemes like the New Home Guarantee had helped customers save an average of 4.78 years.
CBA executive general manager of home buying Dr Michael Baumann said that the news was welcome given the challenges faced by first home buyers with regards to rising house prices and a rising external rate environment.
“As we enter the new year, it’s exciting that even more customers will be able to realise their home ownership dreams with CommBank with a deposit of as little as 2 per cent,” he said.
Dr Baumann said that saving for a deposit is one of the biggest difficulties for first home buyers, but said that the impact of measures like the New Home Guarantee could be clearly seen in the data.
“Our data shows CBA customers who have used one of these home buyer initiatives have been able to enter the property market nearly five years earlier on average than they would if they saved for the standard 20 per cent deposit,” he said.
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Article courtesy of Nestegg