PHOTO: A new report has revealed who is benefiting from home guarantee schemes. NEWS.COM.AU
In the past year, nearly 7,000 individuals in New South Wales were able to purchase homes despite earning less than $80,000. A recent report has shed light on the significant impact of the federal government’s Home Guarantee Scheme, designed to facilitate early homeownership in a challenging real estate market marked by rising interest rates, escalating house prices, and limited housing inventory.
First homebuyers earning under $80K are buying homes using the scheme.
First-time homebuyers in NSW constituted the largest beneficiary group, making their purchases in greenfield areas of western Sydney, Tamworth, Wagga Wagga, and the Central Coast. A comprehensive review of the three available options for the 2022/23 period by The National Housing Finance and Investment Corporation (NHFIC) has delineated the demographics utilizing the First Home Guarantee, Family Home Guarantee, and Regional First Home Buyer Guarantee.
In NSW, there were 6,799 participants in the First Home Guarantee, with Greater Sydney attracting the majority, totaling 3,400 first-time buyers. According to the report, the average home price for participants stood at $652,510, with an average deposit of $49,188. Furthermore, nearly 1,500 first-time buyers across the rest of NSW and 1,674 participants in the Regional First Home Buyer Guarantee made purchases with an average deposit of $38,000 for homes valued around $525,000.
Hugh Hartigan, NHFIC’s head of research, data, and analytics, noted, “The broader macroeconomic environment with rapidly rising interest rates has substantially decreased mortgage serviceability with flow-on effects for affordability, and this has led to first home buyers relying more heavily (proportionally) on the Scheme than in previous years.”
The Family Home Guarantee saw a lower participation rate, with just over 200 participants in NSW. The top areas for participants included Liverpool, Campbelltown, Tamworth, Wagga Wagga, Blacktown, Penrith, Gosford, Kellyville, Kingswood, and Maitland.
Teachers are the main key workers benefiting from the scheme.
NHFIC’s data revealed that participants in their 30s primarily took advantage of the first home and family home guarantees, while younger buyers in their early 20s opted for the regional first homebuyer guarantee. Key workers, such as teachers, nurses, and social workers, were increasingly benefiting from the program. The average single wage for participants ranged from $70,000 to $76,000, while couples’ salaries ranged from $117,000 to $124,000.
On a national scale, there was a growing number of people using the guarantees to secure homes, resulting in almost 10,000 households transitioning out of the program due to accumulating enough equity. Arrears figures for the scheme remained below 0.1 percent.
“In 2022–23, 32,500 guarantees were issued, supporting more than 41,700 Australians to purchase a home. Almost two-thirds (64 percent) of available places across the Scheme were taken up,” the report states. NHFIC’s chief program officer for home ownership, Jennifer Chew, highlighted that the Scheme was assisting an increasing number of Australians each year, including key workers and those in regional areas.
In July 2023, the Scheme expanded its eligibility to include more Australians, such as home buyers who have not owned a property in the last 10 years.
SOURCE: NEWS.COM.AU