Government ups price caps for home purchases under several schemes

Thirty thousand more Aussies will be eligible for the government’s various first home buyer schemes, with the government also announcing expanded property price caps for homes purchased under the First Home Loan Deposit Scheme and the Family Home Guarantee.

Following criticism that the caps were too low, the government has announced a revised list of property price caps for its First Home Loan Deposit Scheme (FHLDS) and the Family Home Guarantee, which apply from 1 July 2021.

The government will also release an additional 30,000 places to eligible applicants under the First Home Loan Deposit Scheme, the New Home Guarantee program, and the Family Home Guarantee from 1 July 2021.

The extra 10,000 places per scheme are expected to help newcomers overcome the challenges of saving for a deposit.

“Through our First Home Loan Deposit Scheme and the New Home Guarantee Program, the Morrison government is helping more first home buyers and single parent families overcome the challenges of saving for a deposit and realising the Australian dream of owning your own home,” the Treasurer Josh Frydenberg said in a joint statement with Minister for Housing Michael Sukkar.

“With the 30,000 new places available from 1 July, now is the time for potential applicants to contact a participating bank or mortgage provider and get their applications underway.”

The government earlier faced criticism over the perceived narrowness – both in terms of size and the pricing caps – of several of its schemes.

Critics took particular aim at the Family Home Guarantee which, in its original form, only budgeted for 10,000 places over four years, with the price caps described as restrictive and unrealistic.

In announcing the changes, Mr Frydenberg and Mr Sukkar explained that the government wants “to ensure that people can continue to purchase a home, as well as accommodate larger families”.

First Home Loan Deposit Scheme and Family Home Guarantee property price caps, effective 1 July 2021 New Home Guarantee property price caps, effective 6 October 2020
Capital City Rest of State Capital City Rest of State
NSW $800,000 $600,000 $950,000 $600,000
VIC $700,000 $500,000 $850,000 $550,000
QLD $600,000 $450,000 $650,000 $500,000
WA $500,000 $400,000 $550,000 $400,000
SA $500,000 $350,000 $550,000 $400,000
TAS $500,000 $400,000 $550,000 $400,000
ACT $500,000 $600,000
NT $500,000 $550,000

The government has also expanded the application of the capital city price thresholds to regional centres with a population over 250,000, recognising that dwellings in regional centres can be more expensive than other regional areas.

Regional centres include: Newcastle and Lake Macquarie; Illawarra (Wollongong); Geelong; Gold Coast and Sunshine Coast.

To find out more, or to review your current loans, get in touch with a Centra Money finance specialist for a confidential and obligation-free appointment at (08) 8211 7180 or info@centramoney.com.au

Article by Maja Garaca Djurdjevic on 22 June 2021 – nestegg.com.au

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