Victoria government to co-own with first time home buyers in pilot project

Victoria government to co-own with first time home buyers in pilot project
Victoria government to co-own with first time home buyers in pilot project

The Victorian government has come out with a package that encourages potential first home buyers to get into the market.

It has come up with a "HomesVic”, a pilot programme in which 400 people will get a chance to co-purchase a home with the government, which will take an equity share of up to 25 percent and get its money back (plus price growth) when the property is eventually sold. 

The programme is aimed at couples earning up to $95,000 a year and singles earning up to $75,000. 

The changes are likely to be welcomed given the growing number of people who are finding it more hard than ever to get into the housing market.

Treasurer Tim Pallas said that the changes are an "important step towards ensuring today's families and future generations will be able to afford somewhere to live".

The state government will also contribute $5 million to Buy Assist, a community-sector based shared equity scheme.

This is modelled, according to reports, on a scheme recommended to prime minister John Howard in 2003 but never adopted.

The $50 million pilot scheme, HomesVic, will target first home buyers who are able to meet regular mortgage repayments, but because of rising rental costs, haven’t been able to save a big enough deposit.

Under the scheme, to be introduced in January 2018, HomesVic will co-purchase up to 400 homes, taking an equity share of up to 25 percent in these properties.

It will be available for both new and existing homes.

By allowing homebuyers to purchase less than 100 percent of the property, they will require a smaller deposit and are able to enter the market sooner. 

Eligible applicants will include couples earning up to $95,000, and singles earning up to $75,000.  

Buyers will need to have a 5 percent deposit.

The pilot will be tested across the state, and when the properties are sold, HomesVic will recover its share of the equity.

To further improve buyers’ chances of owning their own home, the Labor Government will also contribute $5 million to a national, community sector, shared equity scheme, Buy Assist.

With similar goals to HomesVic, Buy Assist will help deliver an additional 100 shared equity homes and help low to medium income households get a foothold in the property market.

The Government is also set to give first home buyers priority in government-led urban renewal developments, with at least 10 percent of all properties allocated to first time buyers.

This approach will be used for the first time at the Arden development.

The plan to develop the 56 hectare site Arden, (pictured above) announced by the Labor Government last year, could be home to around 15,000 people. Under this policy 1,500 of those could be first home buyers.

The Government will also consult with first home buyers, industry and the community about the design and implementation of measures to support first home buyers in private developments, especially those close to jobs and transport.

Artist’s impression of Arden central above.

First Home Buyer Housing Market

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