The federal government has extended the property price caps for homes purchased under the First Home Loan Deposit Scheme, enabling first-timers to secure a property with a 5% deposit.
The Treasury also announced the caps for the Family Home Guarantee will be extended. The Family Home Guarantee enables divorced or separated parents with dependent children to purchase a home sooner with a deposit of as little as 2%
The federal government has confirmed that the new property price caps will apply from 1 July 2021. For example, in Sydney and other major regional population centres such as Newcastle and Wollongong, the cap is now $800,000, while it’s $600,000 outside the major metropolitan areas in NSW. Previously the cap was $650,000 in Sydney. If you are unsure of the relevant price cap for a property, you are looking to purchase, please contact Our Broker to confirm.
The move to increase the thresholds comes following criticism that the caps were too low in some cities, particularly given the solid capital growth enjoyed by many markets over the last 12 months. Craig Betalli, Senior Broker, Our Broker, “It’s only reasonable that with prices increasing around the country that these thresholds have been increased.
“However, measures like this can prove to be a double-edged sword. Frequently, extra government incentives have the effect of creating more buyer demand and pushing up prices further.”
Additional places for first-timers
A total of 30,000 places will be made available under the First Home Loan Deposit Scheme in the new financial year.
Assistant Treasurer and Minister for Housing Michael Sukkar said that the new places would assist Australians in achieving the aspiration of homeownership. “The First Home Loan Deposit Scheme has been a landmark success of the Morrison Government since its commencement in 2020. 30,000 first home buyers have been supported into homeownership through First Home Loan Deposit Scheme and New Home Guarantee already,” Minister Sukkar said.
“Through our First Home Loan Deposit Scheme and the New Home Guarantee Program, the Morrison Government is helping more first home buyers and single-parent families overcome the challenges of saving for a deposit and realising the Australian dream of owning your own home.
“With the 30,000 new places available from 1 July, now is the time for potential applicants to contact a participating bank or mortgage provider and get their applications underway.”
For more information about the First Home Loan Deposit Scheme, the Family Home Guarantee, and the New Home Guarantee Program, call Our Broker on 1800 913 677.