First-time home buyers across Australia will receive another boost as the federal government opens up 10,000 additional slots for the First Home Loan Deposit Scheme (FHLDS). However, one group raised concerns regarding the implementation of the program expansion.
Housing Minister and Deputy Treasurer Michael Sukkar announced that the additional 10,000 spaces for the project will be exclusively reserved for buyers who plan to buy a newly built house or build a house. Under this program, potential buyers will receive a guarantee from the federal government, allowing them to apply for a mortgage with a down payment of only 5%.
"The additional guarantees will be available until June 30, 2021 and will generate more construction and support jobs as part of our economic recovery plan," Sukkar said in a statement.
The federal government initially opened 10,000 slots for the program at the start of the year. The program was then expanded by an additional 10,000 slots in the middle of the year.
"With some 20,000 first-time buyers accessing the program in less than 12 months, it has certainly met and exceeded its primary goals," said Graham Wolfe, CEO of the Housing Industry Association.
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Wolfe said the FHLDS tackles one of the biggest problems for home buyers, which is saving for a deposit to buy their first home.
"The additional 10,000 spaces for new homes and apartments that the government has put into this program will allow more first-time homebuyers to meet their goal of homeownership sooner." , he said.
While the expansion of the system is welcomed by industry players, the Real Estate Institute of Australia has raised some concerns, particularly about the properties targeted by the system.
Adrian Kelly, president of REIA, said the expansion of the program appears to ignore the typical first-time homebuyers' preference for homes.
“Historically, we have found that less than 20% of first time Australian buyers buy a new home. Over 80% of Australian first-time buyers buy established homes. More recently, even fewer small buyers are choosing new homes, ”he said in a statement.
For many first-time home buyers, the affordability of older homes is a crucial consideration when finding a home to buy. Kelly said that in general, first-time homebuyers go for established homes while investors and sellers buy new ones.
"It would have been much better not to limit additional spaces to new construction in terms of economic impacts and first-time buyers' preferences." Kelly said.
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