From January 1 next year, 10-thousand first-home buyers annually, will be able to purchase a property with just a five per cent deposit. The other 15 per cent is to be guaranteed by the government.
Under the scheme, the federal government will guarantee the difference of a standard down-payment and remove the costs of lenders mortgage insurance. The federal government says access to its first home buyer deposit scheme will be on a 'first-come, first-serve' basis. Housing minister Michael Sukkar says the government has identified a clear need for the scheme.
But in capital cities like Sydney it is taking up to 10 years to get a deposit together. In Melbourne, up to eight years to get a deposit together. And often in a rising housing market by the time you've think you've got your deposit, you need even more than what you thought you needed. So the first home loan deposit scheme breaks that nexus. It enables first home loan buyers to get into the market sooner. And we're working very closely with financial institutions and banks to make sure that this is as smooth as possible for first home buyers from 1 January.
The government has also announced price caps for support through the scheme, which is $700,000 for a house in Sydney, $600,000 in Melbourne and $475,000 in Brisbane. Price caps for large regional centres are the same as those for the capital city in their state. Areas with populations under 250,000 have a lower price cap and there is a flat limit for the A-C-T (($500,000)) and the Northern Territory (($375,000)).
Applicants must have earned less than $125,000 in the previous financial year as a single person; or $200,000 as a couple. Minister Sukkar says more details and documents will be made available on the Treasury website from Monday Oct 28.
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