Prospective first home buyers struggling to get into the market will have a more opportunities to buy a property on a deposit of just 5 per cent due to thousands of unused spots from a government scheme being reissued.
Prime Minister Scott Morrison will on Thursday announce that up to 4651 spots on the Home Guarantee Scheme – which also applies to single parents – will be rolled over from last year and added to the pool of available spots this year.
These were guarantees that were taken up by people last financial year who ended up being unable to buy a property for a variety of reasons in the midst of the pandemic, when property prices soared and many people had to stop work.
The scheme helps first home buyers buy a property without having to pay expensive lenders mortgage insurance, which usually applies for anything below 20 per cent, because the government will guarantee their mortgage.
“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,” Mr Morrison said.
“We want to help Australians into their first home or a home that they’ve had built for them and their family, and with our support, first home buyers are at their highest level in nearly 15 years.”
The scheme was first announced in 2019 and applies to single people earning up to $125,000, couples earning below $200,000, and both new and existing properties.
Properties are capped at $800,000 in Sydney, $700,000 in Melbourne and $600,000 in Brisbane.
There is also a program that supports first home buyers who want to build or buy a new home that has higher caps such as $950,000 in Sydney or $850,000 in Melbourne.
The government also introduced support for single parents to be able to buy a home with a deposit as small as 2 per cent.
Nearly 40,000 homes have been bought under the initiatives, which have been taken up by 57,000 people.
First home buyers in NSW have used the help the most, with 10,958 buying an existing property or building or purchasing a new one.
Queensland has had the second highest uptake, with 10,202 first home buyers signing up.
In Victoria, 9306 have taken it up to buy their first home.
The single parent support has only had 1871 people using it across the country, however it only became available in July this year.
A recent report found one-fifth of people accessing the first home buyer scheme were essential workers like nurses.
More than half of the users have been younger than 30.
The report found people were able to buy a home an average of four years earlier due to the guarantee.
There are still available spots under the scheme in addition to the reissued ones.