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An expansion of the government’s Home Guarantee Scheme has been lauded by many in the industry as a good move against worsening affordability.
Just ahead of the 2022-23 federal budget’s official unveiling, the government announced an extension of its home ownership support scheme, which will see 50,000 places allocated across the New Home Guarantee, Family Home Guarantee, First Home Guarantee, and newly introduced Regional Home Guarantee schemes. In the past two years, these initiatives have supported 60,000 home buyers.
Hayden Groves, president of the Real Estate Industry of Australia (REIA), was among the first to applaud the package’s expansion.
“[The] 35,000 places for first home buyers with additional targeted measures of 5,000 for the Family Home Guarantee and 10,000 for a newly created tranche called the Regional Home Guarantee are welcomed,” Mr Groves said.
“This is the combined equivalent of around $24 billion in guarantees and around $30 billion in sales to first home buyers based on the median home loan of $479,548,” he noted.
Mr Groves noted that REIA had been a long supporter of the guarantee program, dating to its first announcement in 2019. With this new package, he opined that the initiative had gone “from strength to strength”.
NAB group executive of personal banking Rachel Slade also welcomed the increase in funding, commenting that customer interest in the scheme had exceeded the bank’s expectations since “day one”.
“Price growth has made it more challenging for many Australians to enter the housing market, which is why support measures such as these are so important,” she said.
Ms Slade particularly welcomed the introduction of the Regional Home Guarantee in its aim to alleviate housing stress across regional Australia, where she noted, “house prices have risen sharply the past 12 months”.
Graham Wolfe, managing director of the Housing Industry Association, similarly praised the new focus on housing in the regions.
“Many people have chosen to move to regional areas over the last two years to build a new life, placing pressure on housing affordability in these areas,” he noted.
“Supporting home building at the same time as supporting people re-enter the housing market can make a real difference,” he said of the regional scheme’s eligibility criteria, which includes applicants who have previously owned a home and those who are willing to embark on new builds.
The government’s introduction of a targeted regional initiative comes on the heels of Labor’s promise, announced last week, that if elected, it would develop a program for supporting 10,000 home buyers per year looking to purchase in regional areas.
At that time, Real Estate Institute of NSW chief executive Tim McKibbin criticised housing affordability mitigation strategies such as Labor’s proposal for missing the main issue.
“Again we see demand strategies proposed when supply is the problem,” Mr McKibbin said.
“It’s not much help to first home buyers to provide reduced deposit incentives to help them buy a home when there are not enough homes to go around”.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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