First Home Loan Deposit Scheme insights

The Commonwealth First Home Loan Deposit Scheme (FHLDS) Trends & Insights from 1 January 2020 to 30 June 2020 has been released.

In Queensland nearly 20% of first home buyers (FHB) used the scheme (1,845). A total of 70 loans were guaranteed in Toowoomba, 56 in Ipswich inner, 45 in Mackay followed by Caboolture, Ormeau-Oxenford, Townsville, Rockhampton, North Lakes, and Springfield-Redbank. Queensland FHBs under the Scheme moved an average of 7 kilometres from their prior residential address.

The median purchase price was $350,000, the deposit made was $20,000 and median buyer age 28 years. The total Queensland FHB market has average loans of around $470k.

Queensland FHLDS purchasers made deposits of around 5-10 % of the purchase price and avoided mortgage insurance costs (this usually requires a 20% deposit). This also enabled earlier home purchase perhaps saving around 45 months.

Queensland purchasers had a median loan of $330,000, which is around 3.4 times their income. Mortgage payments are around 24% of household disposable income.

The report provided by the National Housing Finance and Investment Corporation provides a snapshot of the FHLDS for the first six months of its operation.

As at 30 June 2020, 10,000 scheme places had been allocated. Of these, 6,814 participants had either signed a contract or settled on their home, while the remaining 3,186 were at the loan pre-approval stage and still looking for a property.

The scheme supported one in eight of all first home buyers who purchased a home in Australia. 90% of applicants were under 40 years and 37.7 percent purchased in regional areas. 70 percent of all buyers supported by the Scheme purchased a house 25 percent purchased an apartment and the remaining 5 percent purchased a townhouse.

10 percent purchased a newly constructed dwelling. More than one in six (1,804) first home buyers accessing the Scheme are key workers.

As at 30 June 2020, the Commonwealth Government had guaranteed almost $400 million in deposit shortfalls for first home buyers across Australia.

The report can be seen here. More information in the scheme is available here.

Any views that you have on this can be provided to Policy Manager, Martin Zaltron, via email or on (07) 3229 1589.

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