The Australian government has announced that it will extend the quota of the current home guarantee scheme to 50,000 places a year in the 2022‑23 budget to help more people own their homes sooner.
The Australian housing industry has welcomed the federal government’s decision, saying this would help change the lives of thousands of people.
The scheme enables first home buyers to enter the housing market with a deposit as low as five percent and has supported 60,000 Australians so far.
According to Finance Minister Simon Birmingham, the federal government’s retirement income review indicated that homeownership was the most significant thing for people’s safety and security when they retired.
“So helping people to get into homeownership as soon as possible is one of the best things any government can do to provide economic security right throughout their life into retirement years,” he told reporters in Canberra.
The 50,000 places announced by the government will be allocated as follows:
- From July 1, the number of places available each year under the First Home Guarantee will increase from 10,000 to 35,000. Eligible first home buyers can apply for the scheme to buy a new or existing home with a minimum deposit of five percent.
- From Oct. 1, 2022, to June 30, 2025, a new Regional Home Guarantee scheme will support 10,000 eligible homebuyers, including non-first home buyers and permanent residents, buying or building a new home in regional areas each year.
- The final 5,000 places will go to the Family Home Guarantee between July 1, 2022, and June 30, 2025. This scheme is only available to single-parent families so that they can enter or re-enter the housing market with just a two percent deposit.
Opposition Leader Anthony Albanese said he was content that the federal government had implemented the regional housing policy that the Labor party had announced in the previous week.
“That’s an idea that the government, I hope, steals again on Tuesday night,” Albanese told reporters.
On March 25, Labor announced the Regional First Home Buyer Support Scheme, in which the party promised to help 10,000 first home buyers purchase a home in regional areas every year by providing them with a government guarantee of up to 15 percent.
The scheme was scheduled to start in January 2023 and finish by the end of the 2024/2025 financial year with a price tag of $12.1 million ($US9.07 million) if Labor won the upcoming election.
Albanese said that Labor’s announcement should be seen in the context of the party’s Housing Australia Future Fund, which was expected to increase the housing supply by building more social housing and providing affordable housing for essential workers.
Meanwhile, Graham Wolfe, managing director of the Housing Industry Association (HIA), said that saving for a deposit remained the largest hurdle for prospective home buyers.
“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.
Urban Development Institute of Australia (UDIA), a representative industry association, also welcomed the federal government’s announcement. However, the organisation said that the government needed to link the initiative to measures that improved the housing supply to ensure its successful implementation.
“Unless we boost supply immediately, the looming affordability crisis will be overwhelming – particularly for first homeowners, but also affordable rentals and vulnerable Australians relying on subsidised housing,” UDIA national president Max Shifman said.