4600 unused First Home Buyer guarantee credits to be reissued

Some 4651 unused guarantee credits from the First Home Guarantee Scheme are set to be reissued, rolled over from last financial year and added to the pool of 10,000 available spots this year. Prime Minister Scott Morrison and Housing Minister Michael Sukkar announced the reissue of credits last week after prospective new home buyers caught up in COVID-19 disruption did not make their intended affordable property purchase in the 2020/21 financial year. The scheme is designed to help new buyers own a house or apartment sooner, with a deposit of as little as 5 per cent for first-time owners or 2 per cent for single-parent families. Around 40,000 homes have been bought under the guarantee initiative since its 2019 introduction. First home buyers in NSW have secured 10,958 homes followed by Queensland with 10,202 first home buyers signing up and 9306 in Victoria. Queensland topped the states for new homes taken up so far under the scheme in 2020/21, with 696 purchases. NSW had 442 , ahead of Victoria with 332 and Western Australia at 220. South Australia had 110 homes taken up, ahead of double-digit figures in the ACT, Tasmania and the Northern Territory. The recent release of the annual Trends & Insiders Report for 2020-2021 on the Home Guarantee Scheme noted one in five first home-loan deposit places went to essential workers, including 35 per cent who were nurses. More than half went to women, and 58 per cent of all buyers were aged under 30. A recent review of the operation of the National Housing Finance and Investment Corporation Act found the home loan guarantee scheme had brought forward existing demand. Under the rules, the federal government guarantees the additional 15 per cent needed to make up a typical home purchase deposit and avoid the cost of loan mortgage insurance. “We want more first home buyers to get into the place of their dreams,” Mr Morrison said. “The pandemic and lockdowns have interrupted the plans of many home buyers this year, so this is about ensuring we give thousands more families the opportunity they need." The scheme was first announced in the May 2019 election. It applies to single people earning up to $125,000, couples earning below $200,000, for both new and existing properties. Properties are capped at $800,000 in Sydney, $700,000 in Melbourne and $600,000 in Brisbane. There is also a program that supports first home buyers who want to build or buy a new home with higher caps - $950,000 in Sydney and $850,000 in Melbourne. The government has more recently introduced support for single parents to be able to buy a home with a deposit as small as 2 per cent.