Rimas Veselis - 1 Sep, 2021

Homebuyers Entering Market Nearly Five Years Earlier Than Average

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Despite record prices and limited supply around the country, new opportunities to join Federal Government programs are helping first home buyers and single parents enter the market faster than previously possible.

According to a new report from Commonwealth Bank, prospective homebuyers who secure a place in the First Home Loan Deposit Scheme (FHLDS) or New Home Guarantee (NHG) can buy property nearly five years earlier than other Commonwealth Bank customers.

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Those buying property in New South Wales and Victoria have saved the most time when saving for deposits, mainly due to the high cost of homes in those markets, though the time saving for the rest of the country are also still high.

FHLDS and NHG participants in New South Wales had the highest time savings of 5.05 years, followed closely by Victoria with 4.99, and ACT with 4.53 years saved.

Participants in Western Australia, South Australia, Queensland, Northern Territory, and Tasmania aren’t far behind, saving between 4-4.5 years in descending order.

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In addition to speeding up the process for Australians looking to enter the housing market, the FHLDS and NHG programs also assist with purchasing a variety of property types, including duplexes, townhouses, apartments, and new homes across metropolitan and regional markets.

CBA’s Executive General Manager of Home Buying, Michael Baumann, wants to help both new and re-entering homebuyers successfully get past the hurdle of saving for deposits.

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“We know that saving for a deposit is one of the biggest challenges facing first home buyers and those re-entering the property market. Our data shows CBA customers who have used one of these homebuyer initiatives have been able to enter the property market nearly five years earlier on average than they would if they saved for the standard 20 per cent deposit,” Mr Baumann shared.

“We’ve helped over 6,400 customers purchase their first home sooner and we’re excited that we can continue to support customers under these government schemes. Today’s new spots are in addition to our leading features for home loan customers, including our Home Loan Compassionate Care, award-winning app, and competitive pricing.”  

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Initiated by the Australian government, the FHLDS program is aimed at helping first-time homebuyers spend less time saving for deposits by providing a guarantee that allows eligible participants to purchase a property with a deposit as low as 5%.

To qualify for the FHLDS program, here are a few of the eligibility requirements that applicants will need to meet:

  • Must be an Australian citizen over the age of 18.
  • You may never have previously owned nor held an interest in a residential property.
  • Your annual taxable income must be under $125,000 as a single application or a combined household income of less than $200,000 as a couple.
  • In order to apply as a couple, you must be either legally married or in a de facto relationship, no other relationships are eligible.
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The NHG scheme is focused on helping prospective buyers purchase newly constructed homes upon meeting the following requirements, in addition to the FHLDS requirements listed above:

  • You must be purchased a newly constructed home, off-the-plan home, or land and a contract to build a new home.
  • If purchasing a new home, it must have been constructed after January 1st, 2020, and cannot have been occupied previously.

It’s also possible for first homebuyers to combine these programs with the First Home Super Saver Scheme and other state-specific grants subject to their terms and conditions.

couple are excited to become first homebuyers

Options for Single Parents 

Another exciting development for single parents trying to make their first step on the property ladder, no matter whether they’ve previously owned a property or not is the Family Home Guarantee (FHG).

This newly launched program assists single-parent households with dependents in entering or re-entering the housing market by offering guarantees for deposits as low as 2%.

To apply for an FHG loan, the following requirements must be met:

  • You must be single, not currently married, or with a de facto partner
  • You must have at least one dependent child
  • You may be a first-time homebuyer or previous homeowner, but you must not currently own a home

While competition is fierce to secure a place in these programs, applications are still open. 

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The FHLDS and NHG have 10,000 spots available this financial year, while the FHG has 10,000 places available from July 1st until June 30th, 2025. 

So far, 6,400 Commonwealth Bank customers have been approved for at least one scheme, which Mr Baumann believes has been a big help. 

a family runs into their new home

“Speaking to our lenders and brokers, we know the schemes have been a great success for a wide range of different customers – both singles and couples – looking to realise their homeownership goals across the country,” Mr Baumann said.

“We’ve helped customers buy everything from a duplex in Padstow to a townhouse in Umina Beach, an apartment in Coogee and a newly built home in Box Hill.”

Words by Rimas Veselis 

Sources 

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