First home buyers across Australia can enter the property market sooner from today, with the Albanese Government expanding its 5 per cent deposit scheme months ahead of schedule.
The program, which has already helped more than 185,000 Australians into home ownership, now applies to all first home buyers without limits on income or places. Property price caps have also been lifted in line with rising house prices, giving access to a wider pool of homes.
Under the scheme, the Government guarantees part of a buyer’s home loan, removing the need for lenders mortgage insurance and shortening the years it can take to save for a deposit. The Government says the shift has a generational impact, pointing out that the 5 per cent deposit for today’s median home price of $844,000 is $42,200, the same amount that once covered a 20 per cent deposit back in 2002.
The changes are expected to benefit buyers in both major cities and regional centres. A first home buyer in Sydney can now purchase a $1 million property with a $50,000 deposit, cutting up to a decade from the time usually needed to save and avoiding around $42,000 in insurance costs. In Bendigo, the deposit needed for a $600,000 home falls to $30,000, trimming six years off the savings timeline and saving $25,000 in insurance.
Prime Minister Anthony Albanese said the change would help thousands of Australians. “We’re making it easier for young people and first home buyers to achieve the dream of owning a home. From today, the 5 per cent deposit scheme will be available for all first home buyers meaning more Australians can get into their own home sooner. This change will open the door to thousands more buyers, helping them save money and get their keys faster.”
Housing Minister Clare O’Neil said the measure was part of a wider housing agenda but stressed the importance of immediate relief. “The Albanese Government has a target to support the building of more houses in five years than has ever been built before. But we’re not going to leave a generation behind while we fix decades of neglect. We can build more homes and help first home buyers at the same time. From today, every first home buyer can purchase their own home with just a 5 per cent deposit. That will cut the average time it takes to save a deposit from 11 years down to just 2 or 3, which will mean the difference between being stuck renting in your thirties or owning your own place. It’s really tough for young people trying to get into the housing market. Expanding this scheme means thousands more Australians can stop paying off someone else’s mortgage and start building equity in their own home.”
The expanded 5 per cent deposit scheme forms part of the Government’s broader $43 billion housing package, which also includes commitments to increase housing supply and deliver better outcomes for renters.
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