Australia’s leading homebuilders’ association said the first home loan deposit had ‘proven to be very successful’ and should be extended to help tackle housing affordability and supply problems, announced before the federal budget.
As part of the Housing Industry Association’s pre-budget submission, she said while the recent surge in demand for new homes has been exacerbated by the COVID-19 pandemic, many of the affordability issues are a lasting legacy. past policy failures that have hampered the effective supply of housing.
The EIS predicts that demand for residential buildings will remain high throughout 2022.
Stating that low interest rates for borrowers, fiscal stimulus and more positive employment outcomes than feared, have combined to positively impact housing market sentiment.
Additionally, changes in household spending in response to lockdowns and border closures have resulted in additional demand for residential buildings.
In his pre-budget submission, he recommends; a national housing and land supply strategy needs to be developed, inefficient tax reform, equitable access to capital, a well-educated workforce, and the first home loan deposit system needs to be expanded.
“A place in the [First Home Loan Deposit Scheme] is likely to become more important to first-time homebuyers as lenders implement the Basel III prudential standards which impose higher risk weightings for mortgages with high loan-to-valuation ratios,” said the HIA pre-budget submission.
As part of the pilot, an additional 10,000 places were made available in July 2020 and July 2021.
In response to these issues, the government’s economic stimulus package included an additional 10,000 spaces (the New Home Guarantee) specifically for buyers buying new homes.
While the number of first-time homebuyers declined throughout the latter stages of 2021, lending data for first-time homebuyer activity remained significantly higher than realized for most of the past decade – which EIS attributes, in part, to the success of the program.
“The scheme has proven its value for first-time homebuyers and should become an ongoing tool in the Australian housing market to help first-time homebuyers access homeownership,” the pre-budget submission said. of the HIA.
Among the recommendations of the EIS are:
- Government commits to making the First Home Loan Deposit Scheme a permanent program
- The government removes the cap of 10,000 places per year in the program or increases the number of places considerably over the budget horizon
- New Home Guarantee transaction times should apply to any first-time homebuyer purchasing a new home with a place in the First-Time Home Loan Deposit Program
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