Small, but well-formed. The new home deposit scheme will help, and it's unlikely to push up prices
- Written by Rachel Ong ViforJ, Professor of Economics, School of Economics, Finance and Property, Curtin University
The new First Home Loan Deposit Scheme announced the Coalition, and instantly backed by Labor, is likely to be popular among those on the cusp of buying their first home.
It’ll be open to singles earning up to A$125,000 and couples earning up to A$200,000 who have saved at least 5% of the value of the home. The government-owned National Housing Finance and Investment Corporation will partner with private lenders to put up as much as another 15% of the value of the home to take the deposit to 20%.
However, the scheme is capped at 10,000 home buyers per year, roughly one tenth of the number of Australians who bought first homes in 2018.
It’ll help them - the latest survey shows that more than half of first homebuyers needed financial assistance outside of their own savings to get their deposit. The benefits of home ownership have been widely documented. But will it do enough?
Source of deposits
Authors: Rachel Ong ViforJ, Professor of Economics, School of Economics, Finance and Property, Curtin University