New scheme a hit despite first-home buyer loans hitting five-year low

More than 2000 first-home buyers have taken advantage of a federal government grant scheme to get them into the property market sooner, amid first-home buyer loans hitting a five-year low.

The Albanese government on Friday released the take-up numbers for its Regional First Home Buyer Guarantee scheme, showing 2295 people have accessed the program since its launch in October.

Queensland has experienced the biggest uptake, with 927 grants issued in the sunshine state – 105 on the Gold Coast and 59 on the Sunshine Coast.

The scheme provides a government guarantee of up to 15 per cent for eligible first-home buyers, meaning those with a deposit of as little as 5 per cent can avoid paying lenders’ mortgage insurance.

“We want more Australians to have a safe place to call home,” said Federal Housing Minister Julie Collins.

“The Fund will be the single biggest investment by a Federal Government in social and affordable housing in more than a decade, and will provide a secure pipeline of funding for social and affordable housing.”

Breaking down the figures further, 755 NSW residents took advantage of the scheme (121 in Newcastle and Lake Macquarie, and 54 in the Illawarra), 388 in Victoria (including 67 in Geelong), 117 Western Australians, 67 South Australians and 41 in Tasmania.

It comes as the Australian Bureau of Statistics (ABS) also released a report on Friday showing the number of new owner-occupier first homebuyer loan commitments fell 8.1 per cent in January.

“Owner-occupier first-home buyer lending continued to decline from the high reached in January 2021,” said ABS head of finance and wealth statistics Mish Tan.

“The decline coincided with the winding down of Covid-19 pandemic stimulus measures.

“Anecdotal feedback from lenders suggested that reduced borrowing capacity due to rising interest rates further dampened overall demand for new housing loans in recent months.”

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ABS data released on Friday showing first-home buyer loans hit a five-year low in January.

Meanwhile, despite housing prices enjoying modest rises so far in 2023, the market continues to experience a downturn.

The latest PropTrack data released on Wednesday shows a national 0.18 per cent increase off the back of a 0.09 per cent rise in January.

“Sellers in the market now are benefiting from low competition with other vendors as buyers vie for available stock,” reads PropTrack’s February report.

“The constrained level of properties available for sale is “putting a floor” under home prices and has concentrated buyer demand.”

The nation’s regional areas overall experienced a 0.01 per cent rise in February, while remaining 45.8 per cent higher than prices in March 2020 – around the time the pandemic started drastically affecting markets.

The Regional Australia Institute’s Regional Movers Index, which tracks those from metropolitan centres moving to the regions, showed fewer people have been leaving the big smoke for the country.

Their report on the December quarter, also released Wednesday, shows the level of net migration from capitals to regions fell by 22 per cent to be 48.7 per cent lower than a year earlier.

However, the report notes it’s coming from an historically high base.

“Overall net migration from capitals to regions in 2022 still averaged 45 per cent more than the average in the two years prior to the pandemic,” reads the RAI report, compiled using data from Commonwealth Bank customers.

Article source: Queensland Property Investor