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More Australians achieve the Australian dream of home ownership thanks to Government schemes but stamp duty needs an overhaul

November 8, 2022

One in seven Australian home buyers have been able to buy a home as part of the First Home Loan Deposit Scheme (FHLDS), a new report has revealed.

The National Housing Finance and Investment Corporation’s Trends and Insights Report on the FHLDS has been welcomed by peak industry body, the Real Estate Institute of Australia.

President Hayden Groves said any measures to help Australians achieve home ownership from all regions and ages was welcome amid growing inflation and interest rates.

“The latest ABS figures show the number of new loan commitments to owner-occupier first home buyers fell 8.3 per cent in September 2022,” Mr Groves said.

 “We saw a record number of Australians achieve their first home ownership dream during the COVID-19 pandemic and have seen that ease off in recent times. 

“Programs like the FHLDS will need to remain front and centre as interest rate rises and inflationary pressures create more challenges for first home buyers, and we welcome the support the Scheme provides now for a significant 1 in 7 Australian home buyers.”

However, Angus Raine, Executive Chairman of Raine & Horne, believes more should be done on tax breaks for older homeowners to help improve housing stock and affordability for first-homebuyers and families.

“As stamp duty is paid every time you move into a new property, it becomes more of a hindrance to people being able to move, as the added cost of stamp duty on top of buying a new property is a real disincentive,” he explains.

Angus has long championed stamp duty breaks for empty-nesters aged over 70 plus.

“State and territory governments rely on property taxes for billions of dollars of revenue, and I suspect there will be plenty of pushback to axing stamp duty completely for downsizers,” said Angus.

“Stamp duty-free real estate transactions for older Australians will help address some of the current supply constraints in our property markets and will ensure the state and territory governments aren’t left empty handed financially,” said Angus.

An uncertain future

While Mr Groves said the schemes were instrumental in supporting first home buyers, he cautioned that this market was finding the future less certain.

“We welcome the new and existing initiatives that will support more Australians achieve their first home ownership dream, other factors need to be addressed such as housing supply and stamp duty,” he said.

“REIA will continue to work with government to find meaningful ways of supporting the entire housing market urging for a National Housing and Homelessness Plan and the National Housing Supply and Affordability Council to tackle all aspects of the market.”

Scheme doing its bit

According to Mr Groves, the FHLDS was doing its job despite both housing and rental affordability decreasing.

“Since May, repayments on a $500,000 mortgage have increased by almost $700 each month and household saving is forecast to slump below pre-pandemic levels,” he said.

“Nevertheless, the Scheme is doing its job. It is great that nearly 1400 recipients have transitioned out of the scheme into conventional loans and more than 40,000 Scheme recipients, are ahead of their repayments.”