Login
ISCOVER
The federal government’s scheme has reportedly supported more than 200,000 eligible buyers, according to Housing Australia.
More than 200,000 eligible home buyers have utilised the federal government’s Home Guarantee Scheme (HGS) since its inception in January 2020, according to Housing Australia, with the vast majority of uptake coming from first home buyers.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
Comprising the First Home Guarantee (FHBG), the Family Home Guarantee (FHG), and the Regional First Home Buyer Guarantee (RFHBG), the HGS enables home buyers to access a mortgage with a low deposit without having to pay lenders mortgage insurance (LMI).
Around 193,000 individual buyers have purchased their first home with the help of the HGS, according to Housing Australia, with the scheme proving particularly popular with the third-party channel.
The housing advocacy group told The Adviser 78 per cent of all home buyers supported by the scheme utilised brokers for their application with participating lenders, up from 50 per cent in the scheme’s first year of operation.
Housing Australia also said more than half (52 per cent) of people who accessed the scheme were under the age of 30.
Almost 40,000 key workers – including nurses, teachers, and social workers – purchased a home sooner than they would otherwise have been able to thanks to the HGS, according to Housing Australia.
And the scheme reportedly helped 67,000 participants acquire a property in regional Australia, including nearly 30,000 through the FRHBG.
Housing Australia CEO Scott Langford said it was encouraging to see so many home buyers take up the scheme.
“Together with our participating lenders and their accredited mortgage brokers, we celebrate this milestone which demonstrates the success of partnering to support eligible home buyers to purchase a home sooner,” Langford said.
“Right across Australia the scheme is enabling people to realise the dream of home ownership.”
Foot in the door
While the HGS has proven an effective mechanism for some borrowers – one in three first home buyers took up the scheme in 2023–24, according to Housing Australia’s most recent Home Guarantee Scheme Trends and Insight Report – some have said that more can be done to help certain groups clear the deposit hurdle.
For instance, last year, Sandy Paravizzini, general manager – retail at brokerage Resolve Finance, told The Adviser growing house prices reduced the efficacy of such a mechanism.
Paravizzini said: “In many regions, the median house price has been creeping up so we would like to see the price caps reviewed and increased in line with market growth.
“This is particularly important in regions like Bunbury WA, where the cap is $450,000.
“We haven’t been able to provide the benefits of the scheme to many, if any, of our customers in that region, as the first home buyer house and land entry price point of our builder partners in Bunbury sits around $530,000.
“Addressing these regional discrepancies would significantly enhance the scheme’s effectiveness and reach.”
Chris Raymond, principal finance broker at Sydney-based brokerage Unconditional Finance, echoed this sentiment.
“We find that the number of clients eligible, based on serviceability and income restrictions, are limited,” Raymond said.
“If we manage to satisfy the income requirements, the price caps can also hold our clients back.
“The demand for FHGS is limited among our clients in Sydney given the price cap of $900,000.
“I’d love to see the income and purchase price restrictions increased.
“The median house price in Sydney is close to $1.6 million yet the maximum income a single person in Sydney is only $125,000 under the scheme or $200,000 as a couple.
“More of our clients in Sydney and interstate would access the scheme if the income and price restrictions were increased.”
[Related: ‘Restoring the dream of home ownership’: Coalition pledges $50k scheme to first home buyers]
JOIN THE DISCUSSION