How The 2022 Budget Will Benefit Buyers
With many first home buyers eagerly anticipating news linked to last week’s 2022 Budget announcements, how will the new changes tackle ongoing affordability?
Although there was a great deal of speculation as to what the 2022 Budget will and won’t include, Treasurer Josh Frydenberg finally put some of the rumours to rest with the official release of the annual plan.
According to the Coalition, the Federal Government’s economic plan has helped Australia weather the biggest economic shock since the Great Depression, outperforming the performance of all major advanced economies.
However, it’s also important to note that the Liberal Party is also doing its best to retain its current position in the upcoming election, so the contents of the 2022 Budget have been regarded as the “Hot Chocolate” budget where everyone’s a winner – but what does it all mean for the property market?
Unpacking The 2022 Budget For First Home Buyers
Once again, inflation and wages form a central plank to the health of the economy and to the upcoming election. The sharp jump in fuel prices has begun to flow over into food and even clothing, making the “cost of living” a key election issue.
While housing affordability in Australia has long been a contentious issue, national house prices have reached the point where additional measures were all but guaranteed to feature in the 2022 Budget. Although some announcements were accurately forecast prior to the official release of the 2022 Budget, the key takeaways for first home buyers from the Budget include the following.
FHLDS Expansion – While buyers are usually required to save a 20% deposit or otherwise pay LMI, under the First Home Loan Deposit Scheme, eligible first home buyers can purchase or build a new home with a deposit of as little as 5%, with the government actually guaranteeing the remaining amount. Originally set to wind up on June 30 2022, changes outlined in the 2022 Budget have not only expanded the time frame, but has more than doubled the availability. Rebranded as the First Home Guarantee, there will now be 50,000 guarantees per year for three years from 2022/23, and then 35,000 a year as an ongoing measure.
Family Home Guarantee – Aimed at getting single parents into a home, the newly introduced Family Home Guarantee allows eligible participants to build or purchase an existing home with a deposit of as little as 2%, and isn’t restricted to first home buyers. First introduced in the 2021 Budget as a means to help this demographic to buy their first home or re-enter the market with a deposit as low as 2%, this scheme will also increase to 5,000 places per year until 30 June 2025. This is double the previous scheme’s annual cap of 2,500 places per year, spelling good news for single parents looking to break into the property market.
Regional Home Guarantee – One of the major additions in the 2022 Budget for home buyers to take note of is the introduction of the Regional Home Guarantee. The new scheme will provide 10,000 places per year for first home buyers and people who have not owned a home for five years. Running from 1 October 2022 until 30 June 2025, the Regional Home Guarantee will be open to applicants who either build or purchase a newly-built home in regional areas. In addition, there are reports that the government is hoping to encourage migrants to settle in rural areas by opening the scheme to permanent Australian residents.
Further measures outlined to tackle the rising cost of living include the well publicised fuel excise, additional tax breaks to low and middle income earners, and other funding initiatives targeting regional communities, including a new $2 billion Regional Accelerator Program, with investments in infrastructure, advanced manufacturing, apprenticeships and higher education.
However, the question on the lips of many is this – will the new measures and initiatives be enough to get more Aussies into their first home? With an interest rate hike on the cards in the not so distant future, there’s never been a better time to partner up with a reputable mortgage broker to help you navigate the many variables involved with purchasing your first property – but where do you find one?
Your Secret Weapon As A First Home Buyer
Buying your very first home – and obtaining the finance to do so – can be a time consuming and stressful exercise. Thankfully, the good news is that it doesn’t have to be.
Since their inception in 2012, Madd Loans have worked tirelessly in providing Queenslanders with the finance tools to help turn their dreams into reality. With the entire brand being built on referrals, George takes great pride in making the mortgage process both fun and educational – and he has a swag of awards to prove it.
When it comes to navigating the property world, knowledge is power – so why not book yourself into one of Madd Loans’ free First Homebuyer Workshops? Conducted completely online in a webinar format, George and the team at Madd Loans run participants through the world of finance when it comes to your first home loan. This digital model provides flexibility if you’re trying to work around your employment, and is also conducted in a #CovidFriendly manner.
If you would like to know more about the FHLDS the many other factors involved with buying your first property, please contact the team at Madd Loans today to book in your place at the next free First HomeBuyer Workshop.