Friends with benefits: One way to buy your first home?

One in three Australians who purchased their first homes in FY24 did so with the assistance of the Federal Government’s Home Guarantee Scheme.

An increasing number of buyers are taking advantage of the scheme, with more of them buying homes alongside partners, friends, or family members, according to Housing Australia’s annual report.

This is how and where the new wave of Aussie first-homebuyers are getting the keys to their dream property. Picture: Tim Hunter.

The scheme includes the First Home Guarantee, the Regional First Home Buyer Guarantee, and the Family Home Guarantee.

In FY24, 35,000 places were available under the First Home Guarantee, and 10,000 under the regional program. Both programs enable first-time buyers to purchase homes with just a 5% deposit.

One in three Australians who bought their first homes in FY24 did so with the help of the Federal Government’s Home Guarantee Scheme.

The report revealed that 33,250 of the 35,000 First Home Guarantee places were taken, along with 9,400 of the 10,000 available spots in the regional program.

Single recipients of the First Home Guarantee were typically aged 25 to 29, with a median income of $85,000. Their median home purchase price was $482,000. Couples and joint buyers, typically aged 30 to 34, had a median combined income of $134,000 and a median purchase price of $624,000.

Buyers under the regional program had a median age of 25 to 29, with single buyers earning $78,000 and joint borrowers earning $126,000. Their median home purchase prices were $390,000 for singles and $520,000 for joint buyers.

First homebuyers Their median purchase price was $624,000. Picture: Richard Dobson

The Family Home Guarantee allows single parents and legal guardians to purchase homes with a 2% deposit. In FY24, 5,000 places were offered, and 1,250 were taken. Recipients were typically aged 35 to 39, with a median income of $79,000 and a median purchase price of $425,000.

The scheme’s eligibility expanded in FY24, allowing more people to qualify. This included 13,900 overseas-born permanent residents, 1,600 buyers purchasing with siblings or friends, 800 individuals who hadn’t owned property in the last 10 years, and 100 legal guardians.

Most guarantees were issued in Victoria, followed by Queensland and Western Australia. Interestingly, Melbourne and regional Victoria, despite being weaker markets in FY24, saw strong uptake, likely due to softer prices creating opportunities for first-time buyers. Conversely, buyers in Queensland and Western Australia may have relied on the scheme out of necessity due to rapidly rising property prices.

Popular markets for first home buyers using the scheme included Ipswich and Logan-Beaudesert in Queensland, Parramatta in Sydney, and Melbourne’s western and south-eastern suburbs.

In a climate of rising interest rates, exploring all available options, such as state government stamp duty concessions and grants, is crucial for those looking to enter the housing market. Many of these programs, like the expanded Home Guarantee Scheme, are now available to more than just first-time buyers.

*John McGrath is the founder, Managing Director, and Chief Executive Officer of McGrath Estate Agents.