Regional markets are likely to receive a huge boost under the federal government’s plan to roll out a deposit scheme specifically for buyers outside the capital cities.
The Regional Home Guarantee is an expansion of the existing Home Guarantee Scheme that will support eligible homebuyers, including non-first-time buyers and permanent residents, to purchase of construct a new home in regional areas.
From 1 October 2022 to 30 June 2025, 10,000 potential buyers annually will be able to break into the market with as little as 5% deposit.
Housing Industry Association (HIA) managing director Graham Wolfe said this will serve as a big boost for the regional markets.
“Many people have chosen to move to regional areas over the last two years to build a new life, placing pressure on housing affordability in these areas,” he said.
“Supporting home building at the same time as supporting people re-entering the housing market can make a real difference.”
However, Wealthi co-founder Domenic Nesci said the incentive will put more pressure on the building industry and drive prices up in regional markets which are already in short supply of labour and materials.
“The scheme will exacerbate affordability in the regional markets — the grant incentivises people to stretch for home ownership and will bring forward many homeowners that would have needed to wait the additional 2-3 years to save the remaining 5-15% deposit,” he said.
“My biggest concern about this government grant is it incentivises people to over-leverage on their own home in a time of rising interest rates.”
Most in-demand regions
A recent analysis from PropTrack revealed that Queensland, Western Australia, and South Australia were the biggest states to benefit from the exodus of people from the largest state capitals.
REA Group economic analyst Megan Lieu said a similar trend is evident in regional New South Wales and Victoria, as more buyers chase affordability.
“These interstate movements have prompted an increase in demand for housing within these states from potential owner-occupiers and also investors who are looking to benefit from the competitive rental market,” she said.
PropTrack identified 10 SA4 regions that recorded the biggest decline in days on market over the year to February 2022. The following markets recorded faster selling times during the period:
SA4 Region
Days on market
% Change in days on market
Brisbane Inner City
27
-51%
Barossa – Yorke – Mid North
84
-51%
Logan – Beaudesert
36
-45%
South Australia – South East
57
-44%
Bunbury
75
-39%
North West
36
-39%
Ipswich
45
-38%
Capital Region
42
-37%
Adelaide – North
30
-36%
New England and North West
66
-36%
—
Photo by @heidijfin on Unsplash
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,
millner
,
artarmon
,
glendenning
,
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