Calls for urgent revision of First Home Saver Account Scheme
With first home buyers' apparent low numbers, RateCity has said that it's the First Home Saver Account Scheme that needs urgent looking at.
The government program, launched in 2008 by Kevin Rudd, was predicted to help hundreds of thousands of future home buyers. However, statistics from the Australian Prudential Regulation Authority show that $491 million is held in 45,000 First Home Saver Accounts as of June 2013.
CEO of RateCity, Alex Parsons, said that there are a number of things the government could be doing to improve the scheme.
“Right now, only nine institutions offer these accounts – and despite some offering them in the past, none of the big four banks currently do, so it’s little surprise that many potential buyers haven’t heard of them, and don’t use them,” said Parsons.
“It’s a way for banks to support real saving initiatives for first home buyers – and any scheme that helps would-be buyers to build a larger deposit should be encouraged."
RateCity data points to the average base interest rate being paid on these accounts being 2.54%.
A number of conditions are in place, including that a $1,000 minimum deposit must be reached yearly for four financial years before you can withdraw. The account's balance is capped at $90,000.
“The fact that the major banks have stopped offering the products suggests that they are not attractive enough to the mainstream market to be viable in their current form,” said Parsons.
“A relaxation of some of the conditions, aided by some smart and effective marketing by the government may breathe life back into what is essentially a great idea to encourage responsible borrowing.”