First homebuyers will be able to apply for the Federal Government assistance from January 1, 2020.
First homebuyers will be able to apply for the Federal Government assistance from January 1, 2020.

IN THE MARKET: New scheme for first home ownership

IN A bid to improve housing affordability and stabilise property markets, a new-age first home buyers scheme has been approved by the Federal Government.

The new laws contained in the National Housing Finance and Investment Corporation Amendment Bill 2019 will introduce the First Home Loan Deposit Scheme, allowing up to 10,000 eligible first home buyers on low and middle incomes to purchase a home with a deposit of as little as 5 per cent.

Applicants will be subject to eligibility criteria, including having taxable incomes up to $125,000 per annum for singles and up to $200,000 per annum for couples.

The scheme will apply to owner-occupied loans on a principal and interest basis and will be subject to regional price caps.

"The government recognises that saving a deposit has become a more significant barrier to entering the housing market. It can take 10 years for the average first home buyer to save a 20 per cent deposit," said Treasurer Josh Frydenberg in a joint statement with Assistant Treasurer Michael Sukkar.

Treasurer Josh Frydenberg holding a press conference on the National Accounts yesterday. Picture: Kym Smith
Treasurer Josh Frydenberg.

"These incentives have helped thousands of first home buyers enter the market. In the past year, more than 110,000 Australians bought their first home - the highest level since 2009."

Cowper MP Pat Conaghan said this new scheme would greatly help young people in the region.

"Our government has listened to the community and we have acted to reduce one of the largest impediments some people face when trying to enter the property market for the first time, the 20 per cent deposit required by most mortgage lenders," Mr Conaghan said.

"In our area in today's property market, a 20 per cent deposit can range from $50,000 to $100,000 or more.

"This can take young people on low and middle incomes ten years or more to save up, putting off and in some cases extinguishing the dream of home ownership for many.

Member for Cowper Pat Conaghan delivers his maiden speech in Federal Parliament this afternoon.
Federal Member for Cowper Pat Conaghan.

"We recognised this was not good enough and by creating the First Home Loan Deposit Scheme we have made home ownership more achievable for 10,000 people each financial year starting from 2020."

 The legislation also establishes a new housing research function that will allow the new National Housing Finance and Investment Corporation to examine housing demand and supply and affordability in Australia.

The scheme complements other Government initiatives to reduce pressure on housing affordability in Australia and support local communities which have included:

• The First Home Super Saver Scheme which helps Australians build a deposit for a first home inside their superannuation fund by making voluntary contributions; and

• Investing $1 billion in local infrastructure to unlock new housing supply, in partnership with local councils through the National Housing Infrastructure Facility. The scheme is expected to commence from January 1, 2020.    

Monitor this link for more information.