Boost for first-home buyers in this year's Budget
First-home buyers are among the winners of this year's Federal Budget, with the government floating a new Regional Home Guarantee and boosting the number of places available under several existing schemes.
Under the new Regional Home Guarantee scheme both Australian citizens and permanent residents who have not owned a home for at least five years will be encouraged to either purchase a newly built property or build a home of their own in regional areas.
Similar to the existing First Home Guarantee scheme, eligible buyers using the new scheme will be able to take out a home loan with a deposit as low as 5% without the need for mortgage insurance. Instead, the government will act as the guarantor for the loan.
Starting this year, 10,000 places will be available annually under the scheme until June 2025.
"The introduction of the Regional Home Guarantee has the potential to help these home buyers but also to boost home building in the regions," said Housing Industry Association managing director Graham Wolfe.
"Many people have chosen to move to regional areas over the last two years to build a new life, placing pressure on housing affordability in these areas. Supporting home building at the same time as supporting people re-enter the housing market can make a real difference."
The Budget also outlines an expansion to the number of places available under the existing First Home Guarantee and Family Home Guarantee schemes.
First of all, 35,000 new First Home Guarantee places each year for three years will be made available to first home buyers with low deposits starting from July 1.
An additional 5000 spots each year will also be opened up for single parents through the Family Home Guarantee scheme.
The initiative also allows low deposit buyers to purchase a home without the added expense of lenders mortgage insurance, though eligible single parents are able to purchase with a deposit as low as 2% of the property price.
While these schemes are intended to help more Australians enter the housing market by lowering the deposit bar, rising house prices have also made saving up for a deposit harder.
According to the latest CoreLogic data, the median home value in Australia is now $728,034 - 20.6% higher than it was this time last year.
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