A just-released First Home Loan Deposit Scheme (FHLDS) report has highlighted the key trends and insights from the initiative's first six months in operation spanning from January to June 2020.
The available settlement data from the National Housing Finance and Investment Corporation (NHFIC) indicates one in eight of all first home buyers (FHBs) accessed the scheme to purchase a home; according to analysis from the corporation, the scheme enabled FHBs without alternative financial means to bring forward their purchase by an average of four years.
“Demand for the scheme in the six months to 30 June continued despite the onset of the COVID-19 pandemic,” said NHFIC CEO Nathan Dal Bon.
“First time buyers across age and income spectrums around the country accessed the scheme, and we saw strong interest from buyers in outer metropolitan and regional areas.”
Major cities attracted 62.3% of FHLDS buyers over the six month period, while 37.7% purchased in regional areas. Almost 70% of buyers bought a detached house, 25% opted for an apartment and 5% went for a townhouse.
Half of the guarantees were issued to single buyers with taxable incomes of $60,000 to $80,000, with the majority of couples concentrated in the $90,000 to $125,000 earnings bracket. The median purchase price for houses was $385,000 compared with $475,000 for apartments.
Of the 10,000 scheme placements released for the six months to 30 June, 54.7% of the buyers have settled, 13.4% have signed contracts to purchase a home, and 31.9% have been pre-approved and are looking to buy.
According to the Housing Industry Association (HIA), the data makes it clear the FHLDS should be expanded.
“The findings from the report confirm HIA’s view that this type of government support provides a significant boost for first home buyers,” said an HIA spokesperson.
“There has been significant take up amongst lower and middle income earners, including key essential workers like teachers, nurses and emergency services workers. At times of such financial hardship, it is great news for those who are in most need of financial assistance have been able to get receive it.
“Despite the critism that people are unable to purchase houses in our major cities due to lack of affordable housing, the report shows the major cities still attracted the majority of buyers.
“Increasing the number of applicants able to access the scheme would not only help to boost the economy, but will clearly help lower and middle income workers move into a home of their own much sooner,” the HIA concluded.