Albanese government to bring forward start of its home deposit guarantee changes
- Written by Michelle Grattan, Professorial Fellow, University of Canberra
The Albanese government is bringing forward by three months to October 1 implementation of its 5% deposit guarantee for all first home buyers purchasing properties up to a specified limit.
The universal guarantee was an election promise.
The bring-forward, from January 1, is part of a flurry of government activity after last week’s economic roundtable that paid a lot of attention to the housing affordability and shortage issues.
The government announced at the weekend it would pause further residential changes to the National Construction Code until mid-2029 (apart from essential safety and quality measures). Meanwhile the detailed and burdensome code will be streamlined.
The pause is a variation of a policy the Coalition put forward at the election.
The government will also fast track more than 26,000 homes at present caught up in consideration under the Environment Protection and Biodiversity Conservation (EPBC) Act and accelerate the assessment of new applications.
The deposit guarantee election promise represents a significant expansion of the present scheme.
The current arrangement, which has a cap on the number of guarantees, provides the guarantee on a means tested basis.
Under its changes the government will also raise the price levels for eligible properties.
With the guarantee, buyers avoid having to pay expensive lenders mortgage insurance. The government says that for the average first home buyer the revamped scheme will cut years off the time they require to save for a deposit, and will save people tens of thousands of dollars on lenders mortgage insurance. It expects first home buyers using the scheme to avoid about $1.5 billion in potential mortgage insurance costs over the next year.
A first home buyer will be able to buy a $844,000 home – the median home price nationally – with a $42,200 deposit. On the government’s figures, they could save up to eight years in the time needed to get together a deposit, and avoid about $34,000 in mortgage insurance.
Prime Minister Anthony Albanese said: “Labor was re-elected with a clear mandate to bring down the deposit burden on first home buyers, and we’re delivering”.
Housing Minister Clare O'Neil said: “It’s just not right that an entire generation of young Australians have been locked out of the housing market – saving for decades while paying off someone else’s mortgage. So Labor is changing it.”
