Government schemes help 1 in 10 first-home buyers in 2020-21 – report

The National Housing Finance and Investment Corporation (NHFIC) has released its second annual First Home Loan Deposit Scheme (FHLDS) Trends & Insights Report, which covers data on the FHLDS and the New Home Loan Guarantee (NHG) for 2020-2021.

The FHLDS and NHG are government programs aimed at supporting eligible home buyers in the purchase of their first home. FHLDS and NHG guarantees supported one in 10 first-home buyers during 2020-21, the report found. The report indicated that first-home buyers were able to bring their home purchases forward by an average of four years under the FHLDS, and 4.5 years under the NHG.

Other key insights from the report include:

• Since 1 January 2020, 22,879 home purchases were supported by the FHLDS and NHG, helping nearly 33,000 Australians purchase a first home. The top two states benefiting from the schemes were New South Wales (11,000 residents) and Queensland (9,000 residents)
• Since the NHG was introduced in November 2020, more than 75% of NHG guarantees issued were for house and land purchases or separate land purchases with a contract to build
• 58% of all buyers who took advantage of the schemes in 2020-21 were under 30 years of age
• The schemes achieved broad geographical coverage in line with general population distribution, with more people accessing the NHG in greater capital city areas (76%) compared to the FHLDS (63%)
• Relative to population share, demand for the schemes was strongest in Queensland, which accounted for 26% of FHLDS guarantees and 27% of NHG guarantees. Western Australia also saw strong demand for the NHG
• By postcode, demand for the FHLDS was strongest in Melbourne's north-west, with 109 guarantees issued. Sydney’s north-west posted the greatest volume of NHG guarantees at 158
• The schemes aided more than 3,700 key workers in 2020-21, accounting for 23% of all guarantees issued. Nurses and teachers accounted for nearly 70% of FHLDS and NHG guarantees provided to key workers. Since the launch of the schemes in January 2020, nearly 6,000 key workers have purchased their first homes with support from the FHLDS or NHG
• Despite increasing property taxes, the amount of debt accumulated by first-home buyers under the FHLDS relative to income has declined. On average, FHLDS participants recorded a debt-to-income ratio of 4.78 in 2020-21, down from 4.92 in 2019-20
• The proportion of loans originating from mortgage broker channels has increased significantly, up from 48% in 2019-20 to 56% in 2020-21. Brokers initiated 72% of NHG guarantees

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“It is great to see Australians in all states and territories, capital cities and the regions, helped by these schemes,” said Nathan Dal Bon, CEO of NHFIC. “With growing housing affordability pressures, it is also very pleasing to see the schemes have supported almost 6,000 key workers [in purchasing] their first home.”