Owning a home is headlining the 2022-23 Budget with the government announcing it will double the Home Guarantee Scheme and extend it to non-first home buyers in regional areas.
The early-announcement came as peak bodies and lobby groups continued to pressure the government after the release last week of an inquiry to address housing affordability.
The expanded scheme would make 35,000 guarantees—up from 10,000—to first home buyers with deposits as low as 5 per cent; 10,000 guarantees for regional buyers to purchase or build a new home; and 5000 guarantees to support single parents.
But the announcement aimed at aspiring homebuyers was met with concerns the funding would simply further fuel demand without solving the issue.
Property Council of Australia chief executive Ken Morrison said the announcement was a positive measure to help more aspiring homebuyers overcome the widening deposit gap.
“The Home Guarantee Scheme has been a successful program in helping eligible first home buyers get into the market, and it is welcome news to see its scope expanded so significantly,” Morrison said.
“Bridging the deposit gap is a huge hurdle for many aspiring homeowners and this scheme helps people address this while being appropriately targeted.
“While we warmly welcome this scheme, it is a demand-side measure and won’t in itself do anything to ease supply-side pressures which are a main driver of affordability issues.”
The average home loan deposit hit $100,000 for the first time in April 2021, however, lower interest rates ensured servicing loans was cheaper.
HIA managing director Graham Wolfe said they were pleased to see the scheme extended to people who had sold before the market increased significantly.
“HIA is extremely pleased to see the government expand the scheme to address the missing middle of home seekers—those people who have previously owned a home but have been out of the market, most likely renting, for more than five years in regional Australia,” Wolfe said.
“Many people each year can find themselves back in the rental market after selling their home.
“The reasons vary but once in the rental market, saving a deposit to buying a new home can be just as big a hurdle as it is for first home buyers. Until now, there has been nothing available to help these people re-enter the housing market.”
While the latest announcement could help buyers into the market, there are concerns that the recommendations to address affordability and supply lacked scope.
The National Housing Finance and Investment Corporation modelling shows 1.7 million new houses would be needed in the next 10 years with 550,000 to be constructed in the next three years.
However, more multi-unit dwellings would be needed in this time as the already tight rental markets would be pushed to the limits by the reopening of Australia's borders.