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The NSW government has announced it is “considering a new approach” to reduce the deposit required for first home buyers, in a bid to aid the affordability crisis.
Under the NSW government scheme first home buyers could receive a contribution towards the deposit of an eligible property, in exchange for a “share of equity” – meaning the government would hold an interest in the property.
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The equity would then be repaid when the property was sold or through repayments.
The NSW government said it’s still considering a range of options such as if the scheme would include equity against an existing home, land on which a home buyer builds, or equity against the home of a guarantor.
While the eligibility details for the policy are being developed, the scheme is being geared towards first home buyers to help them enter the property market.
As property prices continued to soar in January making it even more challenging for first home buyers to enter the market, the NSW Government says “home ownership and affordability” forms a “key focus” area for the government.
The increase in property prices has meant many first home buyers are looking further afield and moving regional – fueling the regional migration seen during the pandemic.
NSW regional broker Amy Small, from Small Local Brokers in Wallsend, said while the announcement sounded exciting, she was concerned about the “hoops that will need to be jumped through” to make it happen.
“There is already a lot of paperwork that must be provided. Will this be easier or harder for the first home buyer to take advantage of?
But, Ms Small said as her clients are mainly families buying their first home, the scheme would “open many doors” for long term renters to get into the market.
The state government said if the scheme were approved, it would form part of its “broader housing affordability strategy” and harness existing levers available to the government, such as reducing upfront costs through stamp duty.
A forum, yet to be confirmed, will be held with representatives from across the state – including developers, non-government organisations, peak bodies and government.
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