Australia’s New First Home Owner Scheme
The Morrison Government has dished out more details on its new first home owner plan. It was initially unveiled as an election promise to improve housing affordability for people trying to get onto the real estate ladder. Now with more information coming to light, the plan is taking on shape.
But that doesn’t mean it’s been well received. Let’s take a look at the plan and what people think.
Criteria of the New First Home Buyer Scheme
– A home can be secured by just a 5% deposit, with the federal government guaranteeing the difference (standard deposits are normally 20%).
– Successful applicants will be excluded from paying mortgage insurance, saving them $10,000.
– The grant will be limited to 10,000 Australians annually.
– Applicants need to have earned less than $125,000 in the previous tax year. If a couple is applying the limit is $200,000.
– There are price caps on the properties eligible under the scheme. In Victoria these are $600,000 for a city or large regional centre, $375,000 in other areas.
The plan is set to start on January 1st, 2020, and at the moment the government is seeking feedback. Here’s what a lot of people are thinking:
Feedback on the New FHOG Scheme
– Last year there were around 110,000 first home buyers. A cap of 10,000 on this scheme barely dents that number. Is it enough to affect the housing affordability issues facing a lot of young Australians?
– The property price limits are lower than the median for big metropolitan centres.
– The income limits are fairly high, as only a small percentage of people in Australia, especially younger people, earn more than $125,000. So it’s not directly aimed at poorer people.
– It could increase prices at the lower end of the market.
On the positive side, it looks like the scheme will help successful applicants get into their first home a lot faster than they would have. Here at Ristic Real Estate, that’s something we’re all for. The plan might not be perfect, so let’s hope they can iron out some of the wrinkles before it comes into effect next year.
If you have any questions about the new or existing first home owner scheme, get in touch. Ristic loves helping people get into their first homes and start realising their real estate dreams.
