We know that buying a home is tough right now.
It’s a common story – parents wondering if their kids will ever achieve the great Australian dream of owning their home. First home buyers priced out of capital cities and regional centres where house prices have shot through the roof. Single parents who can’t get into the market.
We have a housing crisis in Australia. It’s harder to buy a home today than ever before.
Forty years ago, almost 60 per cent of young Australians on low and modest incomes owned their own home. Now, it is only 28 per cent.
There is no silver bullet to fix this problem, but a government that actually plans for the future can help Australians realise their dream.
An Albanese Labor Government will help more people get into the housing market sooner by cutting the cost of buying a home by up to 40 per cent.
This will mean a smaller deposit, a smaller mortgage and smaller mortgage repayments.
Help to Buy will be open to 10,000 Australians each financial year.
Eligible home buyers will need a minimum deposit of 2 per cent, with an equity contribution from the Federal Government of up to a maximum of 40 per cent of the purchase price of a new home and up to a maximum of 30 per cent of the purchase price for an existing home.
This would mean that for a homebuyer in Sydney, buying at the maximum price cap of $950,000 with 40 per cent equity, monthly mortgage repayments would be over $1,600 cheaper*.
For a homebuyer in regional Queensland, buying at the maximum price cap of $500,000 with 40 per cent equity, monthly mortgage repayments would be over $850 cheaper*.
Similar schemes are already successfully operating in several states including Western Australia and Victoria.
Homebuyers will not be required to pay rent on the stake of the home held by the Federal Government.
Help to Buy will cost around $329 million over the forward estimates.
You will be eligible for Labor’s Help to Buy program if you meet the following criteria:
The following table shows how much people will save on their mortgage under Labor’s Help to Buy in different cities and regions.
NOTE - Regional centres include Newcastle & Lake Macquarie, Illawarra, Central Coast, North Coast of NSW, Geelong, Gold Coast and Sunshine Coast.
Homebuyers will also avoid the need to pay Lenders Mortgage Insurance, representing an additional saving, depending on purchase location, of potentially more than $30,000.
During the loan period the homebuyer can buy an additional stake in the home when they are able to do so. The minimum stake that a homebuyer can opt to purchase at any one time is 5 per cent.
If the homebuyer’s income exceeds the Help to Buy annual income threshold for two consecutive years, they will be required to repay the Government’s financial contribution in part or whole as their circumstances permit.
Labor’s plan will open up home ownership to more Australians right across the nation – helping those who might not otherwise be able to buy. It’s another practical example of how we will help with the cost of living and deliver a better future for working families.
To pay for our housing affordability polices, Labor will double foreign investment screening fees and financial penalties. These changes will commence from July 2022 and raise around $445 million over the forward estimates.
Help to Buy is part of a suite of Labor policies designed to improve housing affordability and ownership.
This includes:
* Source: NAB home loan repayment calculator. This scenario assumes a 25-basis-point increase on the current base variable mortgage rate of 3.45%, monthly principal and interest over 30 years.
