URGENT UPDATE: First home buyers in Australia can now secure their dream homes sooner than expected. The federal government has announced that the 5% deposit scheme will commence in October 2023, a full three months earlier than its original launch date of January 2026.
This groundbreaking initiative allows first-time buyers to enter the property market with a deposit as low as 5%, significantly reducing the financial hurdles faced by many Australians. Under this scheme, the government will act as a guarantor, covering the remaining 15% of the deposit, effectively eliminating the need for costly lenders mortgage insurance.
Prime Minister Anthony Albanese emphasized the importance of this early rollout, stating, “We want to help young people and first home buyers achieve the dream of home ownership sooner.” He added that this initiative aims to expedite the process for many Australians while saving them money.
The implications of this scheme are profound. A first home buyer looking to purchase a property at the national median price of $844,000 will only need a deposit of $42,200. Meanwhile, buyers eyeing properties in Sydney, valued at the maximum of $1.5 million, will need only $75,000 for a deposit.
Housing Minister Clare O’Neil also highlighted the scheme’s potential to promote equity in home ownership. “The Albanese Labor government is stepping up to level the playing field and back a new generation of first home buyers into the housing market,” she stated. O’Neil emphasized that it is unjust for an entire generation to be locked out of home ownership while paying off someone else’s mortgage.
The government estimates that around 70,000 individuals will benefit from the expanded access of this home guarantee scheme within its first year, surpassing the current cap by 20,000 participants.
This announcement coincides with a pause on changes to the national construction code, intended to streamline home-building processes and facilitate quicker construction. The code will remain on hold until 2029, except for necessary safety standards. This decision follows discussions at the federal government’s productivity roundtable, which also led to expedited environmental approvals for over 26,000 homes.
The earlier start date of the deposit scheme is a pivotal step towards easing the challenges faced by first home buyers in Australia. As the government takes action to support home ownership, many are hopeful that this initiative will pave the way for a brighter future in the housing market.
Stay tuned for further developments on this story as more details emerge regarding eligibility and application processes. The urgency to assist first home buyers is at the forefront of government priorities, making this a significant moment for Australia’s housing landscape.
