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First-home buyers are taking advantage of the First Home Loan Deposit Scheme

First home buyers are now able to enter the market four years earlier

The National Housing Finance and Investment Corporation (NHFIC) First Home Loan Deposit Scheme Trends & Insights report*, released 31st August revealed that first home buyers are now able to enter the market four years earlier than previously planned.

Under the Scheme, eligible first home buyers on low and middle incomes are able to purchase a home with a deposit of as little as 5 per cent. 10,000 Scheme places were released to participating lenders, including Sydney Mutual Bank and Endeavour Mutual Bank, from 1st January 2020. An additional 10,000 Scheme places were released from 1st July for the 2020-21 financial year.

According to the Trends & Insights report, essential workers secured one in six of the scheme's guarantees and half of Scheme guarantees were issued to single buyers with taxable incomes of $60,000 to $80,000. Couples were concentrated in the $90,000 to $125,000 earnings bracket.

Other key insights from the First Home Loan Deposit Scheme Trends & Insights report, which covers the six months to 30 June, include:

  • One in eight of all first home buyers accessed the Scheme, based on available settlement data.
  • Major cities attracted 62.3 per cent of buyers under the Scheme while 37.7 per cent purchased in regional areas.
  • More than half of the homes purchased in capital cities were between 15 and 30 kilometres from the CBD, with couple applicants typically buying further away from the CBD than singles.
  • First home buyers moved an average of 7.6 kilometres from their existing residence. Victorian purchasers moved the greatest distance at 10.4 kilometres from their existing home.
  • Almost 70 per cent of buyers using the Scheme purchased a detached house, with 25 percent buying an apartment and 5 per cent purchasing a townhouse.
  • The median purchase price for houses was $385,000 compared with $475,000 for apartments (most apartments purchased were in capital cities).
  • Of the 10,000 places released for the six months to 30 June, more than half of the homes had settled (54.7 per cent). Another 13.4 per cent of Scheme applicants had signed contracts to purchase a home, and 31.9 per cent had been pre-approved and were looking to buy.

NHFIC CEO Nathan Dal Bon said analysis of the First Home Loan Deposit Scheme's first six months of operation found the Scheme had broad appeal.

"Demand for the Scheme in the six months to 30 June continued despite the onset of the COVID-19 pandemic," Mr Dal Bon said. "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."

If you would like to find out more about the First Home Loan Deposit Scheme and how we can help you buy your first home via the Scheme, please click here.

*To read the full report, please click here.