Billion-dollar boost for homebuyer scheme

THE VICTORIAN Government has poured a further $1.1 billion into its shared equity scheme in a move industry lobby groups say will help more first homebuyers into the housing market.

The government extended its Victorian Homebuyer Fund last month before entering caretaker mode on November 1, ahead of this month’s election.

The additional cash is on top of the $500 million the state has already invested in the scheme, which has supported 2,000 people since opening in Victoria and pre-approved 1,000 more to start house hunting.

The government expects a further 7,000 people to access the plan through the additional investment.

The state contributes up to 25 per cent of the purchase price of an eligible property under the scheme.

It allows prospective homeowners to buy with a deposit as small as 5 per cent of the purchase price without paying lenders insurance.

Home values are capped at $950,000 in Geelong and $600,000 elsewhere in regional Victoria to participate in the scheme, while applicants can’t earn more than $128,000 for singles or $204,800 for joint bids.

“The Victorian Homebuyer Fund has been popular for a reason – it helps people get into their own homes quicker with help from a secure partner,” Treasurer Tim Pallas said.

“Thousands more Victorians will now be able to realise their dreams with this new injection. Combined with the First Home Owner Grant and first home buyer stamp duty relief, it can make a massive difference.”

Urban Development Institute of Australia (UDIA) Victoria CEO Matthew Kandelaars applauded the billion-dollar commitment.

“With cost-of-living pressures and challenges on household budgets, this extension will ease one of the biggest barriers to entry for Victorian families looking to buy a home.

“We’ve called on all parties to prioritise home ownership and support the delivery of new homes, and today’s announcement will do just that.”

Housing Industry Association (HIA) welcomed the decision after it had called for strategies to boost ownership across Victoria as its top state election priority last month.

HIA executive director Fiona Nield cited figures that showed home ownership rates have declined from 43 to 37 per cent for households aged 25-29 in the past two decades, and said the boost was needed.

“Shared equity is an effective way to help people into home ownership sooner. The scheme help buyers who despite being able to service the loan cannot obtain finance for the full cost of a home.”

Industry advocates have continued calling for supply-side reforms to further boost home ownership.