The federal government’s decision to boost the price cap for the Home Guarantee Scheme is a win for regional areas, says broker Aaron Bell.
“The scheme really has become a specialist area of its own,” said Bell, owner of Sydney brokerage Home Loan Village (pictured).
“This increase basically allows more buyers easier access to property in a slightly higher price bracket.”
On April 19, the government announced it would raise price caps for the Home Guarantee Scheme. It raised the price cap to $900,000 in Sydney and regional NSW (previously $800,000) and $800,000 for Melbourne and regional Victoria (previously $700,000). This follows its earlier move to boost the number of spaces available to 50,000.
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Bell said with property prices increasing in a short amount of time, buyers were being priced out of the market.
“It was a big administrative nightmare for buyers and brokers,” he said. “Now 12 months on, albeit property prices are higher and loan volumes are larger, the dramatic property price increase is starting to level out now.”
Bell said the rise in spaces for the scheme would allow more opportunities for first home buyers. He said brokers in areas such as Newcastle, Central Coast, the Illawarra, Geelong, and the Gold Coast should be actively using the scheme with their first home buyers.
“Houses in these areas are being sold at these price caps,” he said. “It is hard to purchase properties in cities such as Sydney and Melbourne under this price cap.”
Bell said it was positive that spaces on the scheme had doubled.
“Right now, in mid-April there are currently no major lenders, second-tier lenders, or regional lenders able to offer any spaces to clients,” he said.
“I am telling my clients now we need to wait until July for the next round of spaces to become available.”
Bell said brokers should prepare ahead of the revised scheme in July.
“It is important to speak with your existing clients or those leads that haven’t been able to secure a space,” he said.
“I also recommend brokers put the word out into their communities that they work with the scheme, educate yourself on it and set yourself and your brokerage apart.”
With spaces doubling and becoming available shortly, Bell said the scheme would become far more mainstream.
“When it comes to first home buyers, information is key as it is an area which receives the most government intervention and concessions,” he noted.
Bell advised brokers to do their research on the scheme, read success stories, and visit the scheme website.
“If you have any questions about it, contact them directly. I also recommend talking to BDMs of lenders who are involved with the scheme to get an understanding around it, along with talking to other brokers who have been involved,” he concluded.
