Home Guarantee Scheme reaches new milestone

Independent national housing authority Housing Australia has said that the Home Guarantee Scheme (HGS) has supported more than 150,000 Australians into home ownership since it was established in 2020.

The federal government initiative supports eligible first home buyers (FHBs), regional Australians, and single parents to purchase a property with a reduced deposit without needing to pay lenders mortgage insurance (LMI) through the First Home Guarantee, the Regional First Home Buyer Guarantee, and the Family Home Guarantee.

Housing Australia provides participating lenders with a guarantee of up to 18 per cent (dependent on the scheme the borrower is part of) and is available through a panel of 33 lenders.

Eligibility for the scheme is dependent on income thresholds and property price caps that differ by state.

Housing Australia said that the demand for the HGS has increased since its creation in 2020, when it supported one in 10 FHBs in the financial year 2020–21 (ended 30 June). The scheme has since expanded and supported one in three FHBs in the 12 months to March 2024, Housing Australia has said.

According to the housing authority, 55 per cent of those supported in the scheme were under the age of 30.

The HGS has allowed 51,900 regional Australians to purchase homes as well as 27,000 key workers. Housing Australia also said that 8,800 teachers, 7,200 nurses, and 1,700 emergency workers have also been supported under the scheme.

Since the expansion of the HGS in July 2023 to allow permanent residents to access the scheme, 9,000 permanent residents have been supported into home ownership under the scheme. Further, Housing Australia said that 500 siblings and 180 friends have been able to jointly purchase a home under the scheme.

Nathan Dal Bon, chief executive of Housing Australia, said: “This is a significant milestone for Housing Australia and the Home Guarantee Scheme. Housing Australia has a passionate team dedicated to delivering this Program with our participating lenders, and together they have successfully implemented multiple Scheme changes and expansions over the past four years.

“The Scheme has grown from 10,000 places in its first year and has now enabled over 150,000 Australians to get their foot on the property ladder and experience the safety and security of home ownership.”

Jennifer Chew, Housing Australia’s chief program officer of HGS said on the milestone: “We are honoured to have had the opportunity to help 150,000 Australians into homes. Back in 2020, the first participant in the Scheme was a teacher who bought their first home in regional NSW.

“Since then, the Scheme has helped many more Australians to buy a home sooner, including the 150,000th participant, a single mother in Victoria who works in nursing. We look forward to continuing to work with our participating lenders and their broker networks to help many more Australians into homes.”

Amid the HGS’ success, the Albanese government’s pre-election promise of a shared equity scheme – Help to Buy – has recently been recommended to the Senate to pass the bill by the Senate economics legislation committee.

If passed, the shared equity scheme would allow 40,000 eligible Australians to purchase property with a minimum deposit of 2 per cent without paying LMI. The government would provide an equity contribution of up to 30 per cent for new homes and 30 per cent for existing homes.

The scheme has faced backlash from the Coalition who argued that Help to Buy was “utterly underwhelming” and would cost the government $5.5 billion, only supporting up to 10,000 households a year. It was also revealed in the Senate inquiry that the Treasury had not taken on any modelling to consider the scheme’s effect on house prices.

Similar equity schemes such as the Shared Equity Home Buyer Helper in NSW have been unpopular, with 94 per cent of places still unused as of March 2024.

Speaking on the Mortgage and Finance Leader podcast, shadow treasurer Angus Taylor said that the Coalition wants to see Australians own their homes rather than more government ownership of homes.

Taylor instead recommended that buyers be able to use some of their superannuation to purchase a home, a policy that the Coalition announced before the last federal election.

[Related: Shadow treasurer slams Help to Buy, pushes super for housing]