The building industry has welcomed the extension of the federal government’s First Home Loan Deposit Scheme, but experts have warned of the risk of borrowers taking on more debt.
It will enable an extra 10,000 buyers who build new homes to get into the property market with a deposit as low as 5 per cent while avoiding lenders’ mortgage insurance, with the federal government acting as guarantor on the loans.
Price caps for the scheme will be lifted, allowing Sydney buyers to purchase a $950,000 home with a deposit of only $47,500. The previous limit was $700,000 and buyers were not restricted to new builds.
Melbourne’s cap will lift to $850,000 from $600,000, while Brisbane will lift to $650,000 from $475,000.
Housing Minister and Assistant Treasurer Michael Sukkar said in a statement on Saturday the program would drive more construction and support jobs as the economy recovers from the COVID-19 pandemic recession.
“The additional grants will not only help first home buyers but also support the jobs of Australia’s tradies at a time when the economy needs it most,” he said.
The places will be open from October 6 until June 30 next year.
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