The idea behind the scheme is to give singles earning up to $125,00 or $200,00 for a couple a greater chance of entering the property market. The scheme is set to partner and prioritise with private lenders in the attempt to boost competition within the market.
This new proposed scheme has been welcomed by the Real Estate industry as it will help fast track first home buyers dream of owning their own home. One of the biggest hurdles when borrowing more than 80 per cent of the property value is that you will be hit with Mortgage Lenders Insurance fee that can cost a buyer thousands of dollars.
Prime Minister, Scott Morrison has said that the new FHB scheme will help buyers save roughly $10,000 on Lenders Mortgage Insurance. Research has found it can take up to 8 years to save for a deposit which is a real barrier to entry. When introducing the scheme, Mr Morrison said that it will cut the time required for a deposit and allow First Home Buyers to enter the real estate market and help build a stronger economy.
Realmark Group Managing Director, John Percudani has said: “The new scheme is a great initiative and particularly relevant in the current market. It will not only be good for buyers but also good for the economy in general. ”
For the Scheme to come into effect, the government will be putting $500 million into National Housing Finance and Investment Corporation with a further $25 million to help develop a team of experts to research the affordability, demand and supply within Australia.
Whilst the new scheme is a great incentive for first home buyers, it will all depend if the outcome of the election this weekend.