Regional Aussies get government first home buyer boost

Thousands of regional Australians will soon get into their first home with only a 5 per cent deposit required, the Albanese government has confirmed on Wednesday (28 September).

Each financial year onwards, 10,000 places will be available through the new Regional First Home Buyer Guarantee (RFHBG), “…to support regional first home buyers to purchase new or existing homes with a deposit of as little as 5 per cent,” the government explained. 

Via this facility the government will guarantee up to 15 per cent for eligible first home buyers, so regional Australians with a 5 per cent deposit “can avoid paying mortgage insurance,” the government explained.

Eligibility will be based on applicants being Australian citizens, they must purchase outside a capital city, and they must demonstrate they have been living in the region in which they are purchasing the property (or adjacent regional area) for at least 12 months.

According to the government, property price caps and income caps will be consistent with the existing First Home Guarantee, administered by the National Housing Finance and Investment Corporation (NHFIC). 

A snapshot of inclusions

As part of government’s “ambitious housing reform agenda” to support people into home ownership and improve the supply and quality of social and affordable housing, the RFHBG includes:

- Widening the remit of the National Housing Infrastructure Facility, making up to $575 million available to invest in social and affordable housing

- A $10 billion Housing Australia Future Fund, which will build 30,000 new social and affordable housing properties in its first five years

- A National Housing Supply and Affordability Council to increase housing supply and improve affordability

- A National Housing and Homelessness Plan to set and deliver short, medium and long-term goals to improve housing outcomes across Australia

- The Help to Buy program, which will reduce the cost of buying a home by up to 40 per cent for 10,000 Australians a year, the government explained

Aiding aspiring first home buyers

Prime Minister Anthony Albanese said: “The previous Liberal National Government left serious housing challenges — we’re getting on with the job of improving housing outcomes for Australians.

“We have brought this support forward to help thousands of people living in regional Australia purchase their own home.

“This is part of our ambitious housing agenda to support more people to purchase their own home as well as investing in social and affordable housing.”

Federal Housing Minister Julie Collins said: “Australians living in regional areas have faced some of the largest drops in housing affordability, making it increasingly hard for locals to save a sufficient deposit.

“The Regional First Home Buyer Guarantee will help aspiring first homebuyers living in regional Australia realise home ownership sooner by overcoming the deposit hurdle. 

“This targeted assistance is an important part of our ambitious plan to tackle the housing challenges we inherited.”

Caps, limits and how to qualify

Once an applicant has accrued their 5 per cent deposit, the government guarantees the other 15 per cent to “… get to the 20 per cent usual deposit,” described Ms Collins.

“There’s no lenders mortgage insurance, so it can save people in regional Australia up to $36,000,” she said.

“So, it’s quite a significant saving for those first-home buyers in regional Australia.”

In terms of caps and limits, Ms Collins explained that it varies from around $400,000–$900,000, depending on where you live in Australia.

“When the system goes live… on the government website, you’ll be able to put in your postcode and see if your area’s eligible and what the caps are,” Ms Collins said.

“A lot of people, particularly first home buyers, have been renting and rents are going up, so they could service a mortgage similar to the type of rent that they’re paying, but the big barrier for them of course is the home deposit.

“For an average home buyer to purchase an average home in regional Australia it takes about 11 years of savings, so it’s quite a significant period of time.

“What this [RFHBG] does is allow them to get into their first home sooner and allows them to move out of the rental market, which frees that up for other Australians.

“That’s why we’ve also got limited spaces.

“… it’s 10,000 places a year for this Regional First Home Buyer Guarantee.”

[Related: Prime Minister earmarks further $575m for social housing]