Home » News » First Home Guarantee Scheme to Expand under Federal Budget 2022
30 Mar, 2022
First Home Guarantee Scheme to Expand under Federal Budget 2022
50,000 first home buyers are now able to enter the property market sooner, with the expansion of The First Home Guarantee Scheme under the Federal Budget announcement made on the 29th March 2022.
50,000 places now available across three schemes for First Home Buyers
Singles earning up to $125,000 and couples earning up to $200,000 will be eligible for all three components of the scheme.
The government will also increase affordable housing by $2 billion through the National Housing Finance and Investment Corporation.
What does the expanded scheme look like?
The First Home Guarantee Scheme, which allows first home buyers to purchase a property with as little as 2% or 5% deposit, will be expanded to assist more first home buyers to enter the property market.
This decision has been made reflecting the rise of property prices and growing concerns that the Australian dream of homeownership is now out of reach for many, especially young people.
50,000 places now available across three schemes for First Home Buyers:
35,000 places for first home buyers in major cities to purchase a new or existing home with a deposit as low as 5% under the First Home Guarantee (previously known as the First Home Loan Deposit Scheme)
5000 places for single parents looking to buy their first home or re-enter the market with only a 2% deposit
10,000 places each year for those wanting to buy or build new homes in regional areas under the new Regional Home Guarantee
Singles earning up to $125,000 and couples earning up to $200,000 will be eligible for all three components of the scheme.
Sydney MP Jason Falinski addressed the problem of house affordability in a federal parliament report released earlier this month.
“Of all the issues that are on the table for this election, housing affordability is the biggest one in most parts of Australia,” he said
The details of the expansion have been outlined in Tuesday’s budget, and Treasurer Josh Frydenberg expressed confidence that the programs would assist more people who have previously struggled to enter the market.
“Since January 2020, the government’s Home Guarantee Scheme has helped almost 60,000 home buyers purchase their first home,” he said.
“It’s why, in Tuesday 29 March’s budget, we’re supporting even more aspiring homeowners to get into the market.”
Increased support for affordable housing
The government will also increase its support for affordable housing by $2 billion through the National Housing Finance and Investment Corporation, according to Treasurer Frydenberg.
This will increase the total liability maximum to $5.5 billion and support around 27,500 dwellings.
“Helping more Australians to own a home is part of our plan for a stronger future,” he said.
Speaking about the expanded scheme, Housing Industry Association (HIA) managing director Graham Wolfe welcomed the government expansion of the scheme.
“HIA is extremely pleased to see the government expand the scheme to address the ‘missing middle’ of home seekers – those people that have previously owned a home but have been out of the market, most likely renting, for more than five years in regional Australia,” he said.
“The deposit gap continues to be the biggest barrier to home ownership; and the first home loan deposit scheme has clearly proven its value over the last 3 years, helping more than 30,000 households buy their first home”
This new announcement has also been applauded by Real Estate Institute of Australia (REIA) president Hayden Groves. He said this significant investment is serving Australia’s $9.9 trillion-dollar private property markets well.
“REIA supported this innovation in public policy when it was first announced in the Federal Election 2019, and the program has gone from strength to strength.
“Now up to 1 in 10 first home buyers utilise the Guarantee program with 6,000 of Australia’s key workers securing their first home through this program – our COVID-19 heroes.”
Looking to buy your first home?
Call us on (02) 9099 3412 or enquire below, so our team can help you navigate your first home buying journey.
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