Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
The federal government is opening up the opportunity for about 1800 would-be first home buyers to get on board the housing market with a deposit of as little as five per cent.
The government’s first home loan deposit scheme, which guarantees a loan for a first time buyer, has already seen 15,000 applicants settled and moved in to their home since January 2020.
The scheme runs until June 30, 2021.
To further support first home buyers, the government will reissue unused guarantees from the 2019/20 financial year from buyers who have since been unable to complete their purchase of their first home.
“This represents a great opportunity for around 1800 buyers to now enter the property market sooner,” Housing Minister Michael Sukkar said.
“First home buyers will be able to apply for these guarantees from the scheme’s lending panel lenders in the coming days.”
He pointed to recent Australian Bureau of Statistics data that showed first home buyers were entering the market at the highest rate since 2009, with loan commitments 56.6 per cent higher than the same time last year.
The announcement came as new figures showed Australia’s construction industry was growing at its strongest pace in more than three years, buoyed by home building activity against the backdrop of record house prices and mortgage lending.
Low interest rates and another of the government’s stimulus measures, Home Builder, among factors driving the home building activity.
The Australian Industry Group/Housing Industry Association performance of construction index rose by a further 2.3 points to 57.6 in the past two months, indicating four consecutive months of positive conditions.
This was the strongest result since July 2017.
HIA economist Angela Lillicrap said new orders in the house building sector remained at a record high in January, consistent with other indicators, including housing finance and new home sales.
“HomeBuilder was the catalyst for consumer confidence in the market improving and this has been enhanced by several factors including low interest rates and growth in house prices,” she said.
Ai Group head of policy Peter Burn said this stronger performance was further evidence of the recovery from the depths of the COVID-19 crisis.
The ABS also said on Wednesday private sector house approvals rose for the sixth consecutive month in December, reaching a record high.
It said 13,638 private sector houses were approved in December, a 15.8 per cent increase compared to November and 55.6 per cent higher than a year earlier.