All first home buyers to be able to buy with five per cent deposit from October

ABC NEWS (Australia)

The federal government's kicking off the return of Parliament today with an announcement that all first home buyers will be able to buy with just a five per cent deposit from October. It's bringing forward the election promise by three months in a bid to get more young people into the housing market sooner. The Prime Minister says the scheme, paired with pausing the national construction code, will make an enormous difference but the opposition is sceptical.

Transcript

00:00This was an election commitment, but it was slated for January of next year.

00:06That will now be brought forward to start in October, and the eligibility expanded.

00:12So the income thresholds have been removed, and from October all first home buyers will

00:18be able to access this scheme where they only need to secure a 5% deposit on their first

00:25property, with the government agreeing to go guarantor on the remaining 15% to meet that

00:3020% threshold to avoid having to pay lenders' mortgage insurance, which is an additional

00:37cost when somebody is trying to purchase a home, which can actually amount to tens of thousands

00:44of dollars as well.

00:45So the income thresholds removed, so irrespective of how much you earn, if you're a first home

00:53buyer, you can access this scheme.

00:56Also, the price caps have been lifted so that there's a greater abundance of property for

01:05people to use this scheme to try and buy.

01:08We have heard from the Prime Minister flagging this expansion this morning, saying that it

01:14is one part of a broader scheme to try and address the housing affordability challenge.

01:20What it does is make sure that we get more people into the market, and the full suite of measures

01:26that we're doing is about increased supply.

01:29More supply makes a difference for affordability as well.

01:34There have been questions about what this particular element of the government's broader housing

01:39plan could mean for house prices, with more people having more money to spend, in theory,

01:47and without a further boost in the supply of housing, whether that would simply increase

01:53the price of houses.

01:55We heard in response to that, Treasury analysis suggesting that the impact of this 5% deposit

02:01scheme, the broadening of eligibility, would have a 0.5% increase on house prices.

02:08But that's over six years.

02:10So the government is talking down the prospect of this having a significant impact on house

02:16prices.

02:17They're also at pains to point out some of the other measures that they are taking to

02:21increase supply, or at least push in that direction.

Category

Transcript

Be the first to comment

Recommended