First-home buyers in the box seat with new deposit scheme

First-home buyers will be in the box seat under the new loan scheme promised by both major parties. This is how it’s expected to change the property buying and selling landscape in Victoria.

First-home buyers will find it easier to jump the first property ownership hurdle under a new scheme promised by both major parties.

Prime Minister Scott Morrison’s helping hand to up to 10,000 eligible first-home buyers a year would allow them to use just a 5 per cent deposit for a loan.

Under the $500 million plan, the government would guarantee the difference between 5 per cent of the purchase price and the 20 per cent deposit banks require.

Labor quickly announced it would match the Liberal Party’s promise if elected on Saturday.

Property experts and economists have welcomed the First Home Loan Deposit Scheme, saying it would help boost the challenged market.

Real Estate Institute of Victoria chief executive Gil King said the policy would make it easier for young buyers to break into the market.

“We expect it will have a positive impact on the property market as young people and long-term renters are further incentivised to buy their first home,” Mr King said.

“House prices have soared 27.8 per cent in metropolitan Melbourne in the past five years and in regional Victoria that figure is 26 per cent. These huge rises coupled with banks’ tighter lending standards and our increasing cost of living has made it difficult for first-home buyers to save a deposit for their first home.”

The changes would mostly impact the property market in the middle and outer suburbs, he added.

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