The government's first home loan deposit scheme is helping young people climb into the market – except in Sydney
The government has released the first figures on its first home deposit loan scheme (FHLDS), revealing which Australians are actually being assisted by it.
It is predominantly single purchasers, with an average income of $67,000 who are being approved, over couples averaging a combined income of $111,000.
Around half of them are from outside of Australia's big three capital cities, and around half in each city were under 30 – with the exception of Sydney.
Visit Business Insider Australia’s homepage for more stories.
The results are in.
The government has given the first progress report on its First Homebuyer Loan Deposit Scheme (FHLDS), which gives homebuyers the chance to get into the market with a 5% deposit and no mortgage insurance.
Despite the criticism levelled at the scheme, and the fact the government has been doing little on affordability itself, demand has been strong.
According to the data supplied to Business Insider Australia, 65% of its 10,000 places have been snapped up in its first month. It leaves just 3,500 Australians the chance to get in on the scheme before another 10,000 places are released in July.
It's also clear those clambering to get in are the young, with Australians aged under 30 making up more than half of the participants in every city, except for Sydney. In the Harbour City, sky-high house prices seem to have priced out even older generations, who now appear to be using the scheme to get onto the ladder, with 51% aged between 30 and 50. Compare that to Geelong, Newcastle, Lake Macquarie, regional New South Wales buyers, where around 70% of buyers fall under that bracket.
When it comes to geography, nearly half of those approved are planning on buying outside of Australia's big three capital cities, helped in part by the fact that prices caps offer more flexibility in cheaper markets. For example, Newcastle and Wollongong both are subject to the same price cap as Sydney -- $700,000 -- despite lower average prices. Likewise, Victoria's Geelong, and Queensland's Sunshine Coast and Gold Coast both enjoy the same buffer.
Significantly, it's the Northern Territory's price cap where buyers are flying close to the sun. The average purchase price sits at 94% of the $375,000 cap allowed, suggesting it may be set too low to really help those in the Top End. Compare that to the supremely affordable Newcastle and Lake Macquarie, where properties are being snapped up for less than 70% of their $700,000 ceiling. Interestingly, seven of ten applicants nationally were buying houses, with only a quarter of Australians looking to buy an apartment despite those price limits.
Those price caps also seem to have shaped the applicant pool. The majority are singles, with couples presumably commanding the kind of borrowing power that either sees them less interested in buying property under the scheme's limits or otherwise not requiring it at all.
The average income for single participants was around $67,000 and couples averaged $111K, well below their respective $125,000 and $200,000 income caps. Unsurprisingly, the Commonwealth Bank has issued more than half of the loans, with NAB – the only other big four bank to administer the scheme – coming in second place.
With 10,000 new places to be created in July, and then 10,000 every new financial year, the government will need to assess how it can be improved. With prices forecast to soar 10% in Sydney and 8% nationally this year, it may have to readjust those price limits, lest the scheme be quickly priced into obscurity.
