The federal government has said it will extend access to its Home Guarantee Scheme designed to help first-time buyers and single-parent families own a home sooner by lowering the barrier to enter the property market and negating the requirement for mortgage insurance.
The scheme was designed to help first-time buyers and single-parent families own a home sooner with a deposit of 5% and 2% respectively.
Prime Minister Scott Morrison and Housing Minister Michael Sukkar announced plans to maintain access to the scheme for the more than 4,600 prospective new home buyers caught by pandemic disruption by reissuing unused credits.
Morrison said as many as 4,651 unused guarantee credits from the 2020-21 financial year would be reissued.
The scheme was already extended a year in the Federal Budget in May, one of several housing policies handed down to improve access to the housing market.
The government also increased the amount Australians could withdraw from their superannuation under the First Home Super Saver (FHSS) from $30,000 to $50,000.
Under the rules of the underwriting scheme, the federal government guarantees the remaining 15% of the 20% needed to make up a typical home purchase deposit.
Queensland tops the states for homes taken up so far under the scheme in 2020 and 2021, with 696 purchases. NSW had 442 in the period, ahead of Victoria with 332 and Western Australia at 220.
South Australia had 110 homes taken up, ahead of double-digit figures in the ACT, Tasmania and the Northern Territory.
With the First Home Loan Deposit Scheme and the Family Home Guarantee combined, more than 39,000 homes are covered.
At a speech delivered on Thursday, Morrison pointed to the number of Australians who had received federal assistance to get into a home.
“The pandemic and lockdowns have interrupted the plans of many home buyers this year, so this is about ensuring we give thousands more families the opportunity they need,” Morrison said.
The Prime Minister said that between the guarantee and the separate HomeBuilder and First Home Super Saver scheme, more than 300,000 Australians have been helped into their first property.
Sukkar said about 60,000 new owners had been included in federal assistance programs so far.
“The Morrison government will continue to provide Australians who have that aspiration to go and buy a home, the opportunity to go and achieve that,” he said.
In October, a statutory review of the operation of the National Housing Finance and Investment Corporation Act found the home loan guarantee scheme had brought forward existing demand rather than boosting it, by enabling people who could not otherwise buy property to get a foot on the housing ladder.
Economists have also criticised the government’s policies, claiming that many that sought to address funding rather than structural issues around affordability had inflated demand in markets not in need of it.
Alex Joiner, chief economist at IFM Investors said the policies had not addressed prices or demand, both of which continued to climb throughout the year.
“[First home buyer] schemes from all governments always target purchasing power as this works politically – yet it is all but unanimous among economists that doing so adds momentum to the price rises of homes these people are trying to buy,” Joiner said.