Major Cities Attract 62pc of First Home Buyers

Major cities attracted 62.3 per cent of first home buyers tapping into the First Home Loan Deposit Scheme, while 37.7 per cent purchased in regional areas.

The National Housing Finance and Investment Corporation (NHFIC) has released its analysis of the First Home loan deposit scheme’s first six months of operation.

Almost 70 per cent of buyers using the scheme purchased a detached house, with 25 per cent buying an apartment and 5 per cent purchasing a townhouse, reveals the trend and insight report.

The median purchase price for houses was $385,000 compared with $475,000 for apartments, with most of the apartments purchased in capital cities.

NHFIC chief executive Nathan Dal Bon said demand for the scheme in the six months to 30 June continued despite the onset of Covid-19.

“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.”

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 income bracket.

Another important finding is that significant take-up was seen among lower and middle-income earners, including key essential workers who comprised more than 1,800, or one in six, first home buyers using the scheme.

Teachers were the largest group, at 37 per cent, followed by nurses at 25 per cent.

“The time it takes to save a deposit is always a challenge for first home buyers, but today more than ever, combining this with tougher lending restrictions had meant first home buyers were waiting years to achieve their home-ownership dream,” the Housing Industry Association said of the scheme.

“The fact that 10 per cent of guarantees were provided to buyers over the age of 40 reflects this challenge.”

Based on the NHFIC’s analysis, the scheme enabled first home buyers without alternative financial means to bring forward their purchase by an average of four years.

Related: How Australia Lost Control of House Prices

The report also found the scheme supported one in eight of all first home buyers who purchased a home between March and June this year.

In the lead-up to the 6 October budget, Real Estate Institute of Australia president Adrian Kelly has recommended an expansion of the scheme to include all first home buyers.

The HIA’s pre-budget submission also advocates for an additional allocation of guarantees.

“This scheme provided an almost immediate solution for 10,000 first home buyers and it is hoped the second tranche of 10,000 guarantees, released on 1 July, is just as quickly taken up.

“Increasing the number of applicants able to access the scheme would not only help to boost the economy but will clearly help lower and middle-income workers move into a home of their own much sooner.”