Victorian first-home buyers can make an up to $850,000 first step onto the property ladder under an extended and revised key housing support program.
On Saturday, Housing Minister Michael Sukkar announced an additional 10,000 First Home Loan Deposit Scheme places, and raised the cap in Victoria from $600,000 to $850,000.
But the extra 10,000 places nationwide are reserved for those buying off the plan, or a newly built home.
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The scheme allows first-home buyers to purchase a home on a deposit as low as 5 per cent without paying lenders’ mortgage insurance, as the government goes guarantor on their loan.
Building industry groups have lauded the move, but warned the state’s new home industry will need further support — urging for an extension to the nation’s $25,000 HomeBuilder grants in Victoria as well.
The extra places are in addition to another 10,000 on offer across the 2020-2021 financial year, and a further 9984 that were taken up in the first six months of this year.
The latest tranche will available from October 6 to June 30.
The state’s treasury has advised there are no plans to raise the $750,000 cap that applies to the up to $20,000 on offer in First Home Owner Grants, or for stamp duty concessions.
The federal government has not said if it will raise the $750,000 cap for the $25,000 HomeBuilder scheme which ends at the end of the year.
Urban Development Institute of Australia Victorian chief executive Danni Hunter said the federal government’s extension of the FHLDS was a positive step, but more was needed.
“Expanding the First Home Loan Deposit Scheme is a sensible move by the Federal Government that will help first-home buyers into their new home,” Ms Hunter said.
“The Commonwealth Government should also be considering an expanded and extended HomeBuilder scheme specifically focused on Victoria, to make sure Victorians do not miss out on the existing scheme because of our restrictions.”
Master Builders Victoria chief executive Rebecca Casson said the new-home industry expected a “huge impact” on the pipeline of new projects in 2021, and welcomed support programs that extend into the new year.
“The announcement helps incentivise activity and is what residential builders will need to fill that pipeline,” Ms Casson said.
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“The timelines illustrate the need for continued stimulus action through 2021, and how a similar extension and expansion of HomeBuilder is needed in Victoria too.”
She warned with renovations still sidelined by stage four lockdown measures, many builders across Melbourne would be facing a challenging year to come as they tried to recoup income with fewer projects ahead.
Real Estate Institute of Australia president Adrian Kelly said the government should include established homes in the expansion.
“Historically we have seen that less than 20 per cent of Australian first-home buyers buy new homes,” Mr Kelly said.
“First-home buyers in lower value established homes also usually embark on a program of home improvement and renovation providing a stimulus to the building sector.”
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