AHURI’s recent analysis of housing measures in the 2021 Federal Budget outlined this Government’s focus on supporting first home buyers.
Commonwealth and state/territory support for home buyers takes a number of different forms; however, government support has long term public benefits when it focusses on increasing the number of dwellings in the community.
Commonwealth Government loan guarantee
Through the First Home Loan Deposit Scheme (FHLDS) the Government is targeting people who haven’t been able save enough of a deposit to get a loan from a bank or other lender to buy a home. Using the FHLDS, first home buyers can buy a home with a 5 per cent deposit rather than the 20 per cent deposit usually required by banks.
The Commonwealth Government, through the National Housing Finance and Investment Corporation (NHFIC), effectively guarantees to the lender up to 15 per cent of the home’s value. The intention is that first home buyers can purchase a home sooner as they need a much smaller loan deposit than would otherwise be the case, however the home buyers must be able to afford the ongoing loan repayments.
In a similar vein, the Family Home Guarantee is designed to help eligible single parents with children buy a home with a deposit of 2 per cent. Once again, the home buyer will have to show that they are able to repay the loan to their bank or other lender.
Commonwealth Government HomeBuilder grant
HomeBuilder provides eligible owner-occupiers (including first home buyers) with a grant to build a new home, substantially renovate an existing home or buy an off the plan home/new home.
HomeBuilder provides a $15,000 grant for eligible contracts entered into on or after 1 January 2021 until 31 March 2021 (inclusive). (A $25,000 grant was available for eligible contracts entered into on or after 4 June 2020 up to and including 31 December 2020.)
First Home Owners Grant (FHOG)
Various states and territories across Australia have differing versions of first home owner grants.