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The Victorian Homebuyer Fund has approved more than $75 million in shared equity funding during its first four months, with 500 residents now settled in new properties.
The $500 million Victorian Homebuyer Fund was launched in October, under which the government would pay up to 25 per cent of a property’s purchase price if eligible borrowers have a 5 per cent deposit.
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Aboriginal and Torres Strait Islander participants are also able to buy with a deposit as low as 3.5 per cent, while the government will contribute up to 35 per cent.
Since the roll-out, 500 applicants have already settled in properties, with hundreds more approvals reportedly allowing participants to make offers on homes around the state.
The median price of properties purchased under the scheme is around $630,000 and the median state equity contribution sits at around $150,000.
For single households, successful applicants have mostly had annual incomes between $40,000 to $80,000.
Demand had been strongest in the 25-44 age group, with most approvals so far being in Melbourne and Geelong.
The Victorian government referred to research that found first home buyers can take an average of eight years to save a 15 per cent deposit for a typical home in greater Melbourne.
But, the HomeBuyer Fund could cut down the saving time and relieve home buyers from the costs of obtaining lenders’ mortgage insurance (LMI), the state noted.
“We know it can take years to save for a home deposit and this is a really practical way that we can help Victorians get into their own homes sooner,” Victorian Treasurer Tim Pallas said.
The scheme has a capacity of up to 3,000 applicants.
Home owners can buy out the government’s share at market value over time, with the state promising to reinvest the payments into helping other home buyers under the scheme.
Purchase prices are capped at $950,000 in Melbourne and Geelong, and $600,000 in regional Victoria.
There are 42 eligible regional locations that are chosen based on forecasts and jobs growth, including Bendigo, Mildura, Shepparton, Ballarat, Daylesford, Warragul, Sale, Gisborne, Portland, Echuca and Bairnsdale.
The scheme is only available to single individuals who earn less than $125,000 or a combined $200,000 for multiple-person households.
This week, Tasmania has also launched a number of housing measures, including the expansion of stamp duty concessions and first home buyer grants.
[Related: Tasmania expands housing measures]
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