Housing Industry Association (HIA) Managing Director Graham Wolfe, has said that “housing is a national priority”. He and HIA have welcomed these changes and believe that this opportunity will facilitate stimulating the current first-home buyer economy. It has been urged by HIA that the first-home buyer market needed distinct assistance in being able to overcome the pain-point of saving for a deposit. For a first-time buyer, saving a sufficient deposit can be a significant challenge in today’s world.
Mr Wolfe said, “Along with stamp duty and securing finance, the time it takes to save a home deposit remains one of the main barriers to people's home ownership aspiration”.
Recent studies through the UBS have found that the average Australian will need to save for decades to meet the requirements, adding more pressure to the mounting conversation around needing to provide more support to this market.
Under this new scheme the standard 20% deposit required by most banks, will be carried by the government, up to 15%. A struggling first-home buyer will be able to take out a mortgage, only having to save 5% deposit. This scheme will hopefully shave years off the time it takes these first-home buyers to save for their deposit.
Price and geographical caps have now been released, with WA sitting at the lower end of the scale, however still relative to the national market, at $400,000 for capital cities and regional centres, and $300,000 for the rest of the state.
When speaking with Realmark Group Managing Director, John Percudani, he said, “While our price cap may appear to be lower when compared to the remaining states, this provides an excellent platform for First Home Buyers to enter the market. The current market conditions give more flexibility of budget and what you can get in that price range”.
In addition, the successful introduction of the bill will include a new research function, supported by $25m of funding, which will allow for an examination of the housing demand, supply and affordability. NHFIC will be undertaking this research to further understand what needs to be done to help encourage the economy.
Initially, the scheme was designed to help 10,000 buyers as it gets rolled out from January 2020. Singles earning up to $125,000 annually, and couples with a combined $200,000 annual income, will be eligible for the scheme. As well as needing to be owner-occupied loans on a principal-and-interest basis, plus regional price caps will be in place.
However, with only 10,000 positions available, some experts are saying that this commitment simply isn’t enough. Data shows that more than 100,000 first-home buyers made their entrance into the property market last year alone. Now with prices, potentially looking to move up, it is expected we can see more people likely to show their interest in moving into the market and taking advantage of the price swing. The question sits around how this scheme will keep up with the demand. It also remains unclear as to how the 10,000 will be allocated in the market.
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