The program is a hit despite first-home buyer loans hitting a five-year low
More than 2,000 first-home buyers have made use of a new federal government grant scheme to help them get into the property market, marking a success for the program even as first-home buyer loans hit a five-year low.
On Friday, the Albanese government released the take-up numbers for its Regional First Home Buyer Guarantee Scheme, which showed that 2,295 people have taken advantage of the program since it launched in October, The Australian reported.
The program provides a government guarantee of up to 15% for eligible first-home buyers, allowing borrowers with a deposit of as little as 5% to avoid paying lenders’ mortgage insurance.
“We want more Australians to have a safe place to call home,” Federal Housing Minister Julie Collins told The Australian. “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.”
Queensland saw the largest uptake, with 927 grants issued statewide, including 105 on the Gold Coast and 59 on the Sunshine Coast.
There were 755 grants issued in NSW, 388 in Victoria, 117 in Western Australia, 67 in South Australia and 41 in Tasmania, The Australian reported.
Loan commitments tumble
The news came as the Australian Bureau of Statistics released a report showing that the number of new owner-occupier first-home buyer loan commitments tumbled 8.1% in January.
“Owner-occupier first-home buyer lending continued to decline from the high reached in January 2021,” said Mish Tan, ABS head of finance. “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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While the market continues to experience a downturn, house prices have seen modest upticks recently, The Australian reported.
PropTrack data released last week showed a national price increase of 0.09% in January, followed by a 0.18% rise in February.
“Sellers in the market are now benefiting from low competition with other vendors as buyers vie for available stock,” the PropTrack report said. “The constrained level of properties available for sale is ‘putting a floor’ under home prices and has concentrated buyer demand.”
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