Raine & Horne has commended the federal government for the expansion of the First Home Guarantee and the Regional First Home Buyer Guarantee but said more help is needed to help the next generation of Australians enjoy the security of homeownership.
Effective July 1, the two first-home support schemes will allow co-buyers to buy a property with a deposit of just 5%. The news came after Minister for Housing Julie Collins announced that the definition of a “couple” used for each scheme will be expanded from a married or de facto couple to “any two eligible individuals.”
“The broadening of the concept of ‘couple’ is a step in the right direction of solving the nation’s housing crisis as it allows buyers to pool their financial resources and improve their buying power,” said Angus Raine (pictured above), executive chairman of Raine & Horne.
Raine is urging co-buyers, whether they be friends, siblings, or relatives, to carefully consider the arrangement.
“Buying a home is a major investment, and money and friendship is not always an easy mix,” he said. “It is important to discuss how sharing a home will work – from divvying up ongoing property expenses to deciding how issues such as one co-owner wanting to sell the property will be resolved.”
Raine said there should be a co-buying arrangement drawn up by a solicitor, to spell out the details on where both buyers stand at the start of the deal and further down the track.
Raine is calling on the federal government to provide additional support to help young Australians get onto the property ladder
“One of the key elements of Labor’s 2022 election platform was a shared equity scheme called Help to Buy, designed to assist up to 10,000 low to middle earners own their own home,” he said. “Yet here we are, fast approaching mid-2023, in the midst of a serious housing crisis, and we are no closer to a shared equity scheme being available.”
In May 2022, the then Labor Opposition said the Help to Buy scheme would provide eligible homebuyers with an equity contribution of up to 40% of the purchase price of a new home and up to 30% of the purchase price for an existing home.
Under the plan, homebuyers would need a 2% deposit and qualify for a standard home loan with a participating lender to finance the remainder of the purchase.
“We have seen the government double Foreign Investment Review Board application fees with the express purpose of funding Help to Buy,” Raine said. “Yet desperate home buyers still have no indication of when the scheme will commence.
“We can only hope that the upcoming federal budget provides some sort of clarity on the availability of the scheme, allowing Australians to make firm plans to get started in the housing market.
“If the government does allocate funding to bring Help to Buy to life, a comprehensive communication strategy will be essential to ensure consumers know about it. In a crowded news environment, many schemes fall flat simply because people aren’t aware of what’s available.”
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