Labor has made an election promise to extend the existing First Home Loan Deposit Scheme out to regional areas, but small tweaks to the scheme will do little to change the state of play for first time buyers on the Coast.
Billed the “Regional First Home Buyer Support Scheme,” it contains two strands that set it apart from the Federal government’s current offering.
Like the existing scheme, Labor’s Regional First Home Buyer Support Scheme will help first home buyers purchase a home with a deposit of just five per cent, without the need to pay Lenders Mortgage Insurance.
There are several regions in the country that do not benefit from the existing scheme – and Labor is promising to amend that situation – however, the Coast currently sits in the scheme’s authorised boundaries.
For example, in Chain Valley Bay, on the Upper Central Coast – erhaps an area as ‘regional’ as the Coast gets – the scheme is accessible now, albeit with a limit on purchase price up to $700,000.
Labor says that it will increase that cap to $800,000 for buyers on the Coast should it get elected, but neglects to mention that the current scheme will see caps automatically rise to $800,000 at the start of the next financial year.
In a statement, it said the, “Albanese Labor Government will also improve the operation of the current scheme by reviewing and updating the price caps on a six-monthly basis and improving the process of reallocating unused guarantees.”
For the past three years, the scheme was reviewed and price caps that originally sat at $550,000 were systematically upgraded to their current level at $700,000.
What could be of potential use to those on the Coast who hope to snare a property at the price of $800,000 – bearing in mind fewer than 25 freestanding homes in the 2259 postcode were on sale for less than $800,000 at time of publication – is that Labor promises to reallocate unused guarantees.
Each year, the scheme administered by the National Housing Finance and Investment Corporation and made available by a handful of banks handpicked by the federal government makes 10,000 places available at the start of the financial year.
In 2019 and 2020, those places were enthusiastically snapped up within two months.
It remains to be seen how many unused guarantees could be reallocated by Labor.
Nicola Riches