Helping aspiring homeowners realise their dream

Tens of thousands more Australians will be able to buy a house with the Morrison Government’s new property price caps for the successful Home Guarantee Scheme.

Increasing the price caps for homes available under the Scheme means more people have more options when purchasing a home, and the new caps help accommodate larger families under the Family Home Guarantee.

Prime Minster Scott Morrison said the Home Guarantee Scheme had already helped 60,000 Australians on the path to home ownership.

“We’re building a stronger future for Australians by making home ownership easier by making more properties eligible for the Scheme and expanding it to 50,000 places each year,” the Prime Minister said.

“People are cutting years off the time they’d need to save a deposit for a home because of this program. Now even more Australians can get into a home sooner.

“Saving to buy a house has always been hard work and we know as prices have increased it’s been getting harder.

“That’s why these higher price caps will help more people realise their dreams and lock in a stronger future for themselves.”

The adjusted price caps take into account the 50,000 place per year expansion of the Home Guarantee Scheme, particularly in regional areas where the new Regional Home Guarantee is open to non-first homebuyers.

Assistant Treasurer and Minister for Housing Michael Sukkar said that the adjusted price caps would help guarantee more Australians can achieve the dream of owning their own home.

“As a Government we fundamentally believe in the aspiration of home ownership, with people being able to build a place of their own and invest in their future. We know the importance home ownership brings, which is why we are expanding our extraordinarily successful Home Guarantee Scheme,” Minister Sukkar said.

“We acknowledge how hard it can be to buy a new home or re-enter the housing market and that saving a deposit is the hardest part of getting into home ownership. By adjusting the price caps for the Home Guarantee Scheme, we are ensuring Australians have more options when buying a home.

“Because 41% of scheme-backed loans are ahead of their pay back schedule, we are confident these adjusted price caps strike the right balance.

“60,000 Australians have already been supported into home ownership under the Home Guarantee Scheme, with the Morrison Government’s housing policies helping more than 300,000 Australians with the purchase of a home. With our support, first homebuyers reached their highest levels in 12 years.”

In particular, the new price caps for regional areas will ensure that the supply of new builds in regional Australia is supported, helping ease supply constraints that are being felt outside of the major cities. The adjusted caps will also assist in accommodating larger families under the Family Home Guarantee

As announced in the Budget, under the expanded Home Guarantee Scheme the Government will make available:

• 35,000 guarantees each year, up from the current 10,000, from 1 July 2022 under the First Home Guarantee, to support eligible first homebuyers to purchase a new or existing home with a deposit as low as five per cent;
• 10,000 guarantees each year from 1 October 2022 to 30 June 2025 under a new Regional Home Guarantee, to support eligible homebuyers, including non-first home buyers and permanent residents, to purchase or construct a new home in regional areas;
• 5,000 guarantees each year from 1 July 2022 to 30 June 2025 to expand the Family Home Guarantee announced in last year’s budget. Australia’s first ever specifically targeted single parent family housing scheme supports eligible single parents with children to buy their first home or to re-enter the housing market with a deposit of as little as two per cent.

The capital city price thresholds apply to regional centres with a population over 250,000, recognising that dwellings in regional centres can be more expensive than other regional areas. Regional centres include: Newcastle and Lake Macquarie; Illawarra (Wollongong); Geelong; Gold Coast and Sunshine Coast.

To participate, borrowers will still have to meet the usual loan and repayment assessments from their financial institutions. This ensures that home buyers are protected against entering into a loan arrangement that could result in substantial hardship.

The new price caps will come into effect on 1 July 2022. Information on how to apply, eligibility requirements and the participating panel of lenders is available on the NHFIC website.