Doubling Home Guarantee Scheme: Good start but still not enough for Queensland housing market, says

The 2022 Federal Budget delivered some good news for the Queensland real estate market, with the main initiative to tackle housing affordability being the continuation of the Home Guarantee Scheme and the doubling of the places offered.

The Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella welcomed the expansion of the Home Guarantee Scheme from 20,000 to 50,000 places a year – but expressed concerns over whether the measures went far enough to have a meaningful impact.

“This Federal Budget gets a tick of approval from us for its support for single parent families and first home buyers and its objective to encourage people to move the regions,” Ms Mercorella said.

“However, while expanding the Home Guarantee Scheme is a good start and definitely a step in the right direction, it must be acknowledged that 50,000 places is not nearly enough to meet national demand.”

FIRST HOME GUARANTEE

“The REIQ welcomes support for first home buyers with 35,000 places announced as part of the extended First Home Guarantee allowing them to purchase a home with a 5% deposit without having to pay mortgage insurance because the government guarantees the loan,” Ms Mercorella said.

“Any budgetary measures that support first home buyers to manage the challenge of saving a significant deposit and realising their dream of home ownership sooner is to be applauded.

“However, considering there were nearly 17,000 first home buyer loans in Queensland alone in the year to January 2022 (ABS), and 36,000 first home buyer loans in Queensland alone last financial year (boosted by the HomeBuilder Grant), you can see how 35,000 places nationally is not going to make much of a dent on demand.”

FAMILY HOME GUARANTEE

“The REIQ is pleased to see there are another 5,000 places for single parents who earn up to $125,000 a year to have assisted access to established housing under the Family Home Guarantee - allowing them to purchase their first properties or re-enter the housing market with just a 2% deposit,” Ms Mercorella said.

“Extending the support to assist single parent families is commendable. Particularly considering when this initiative was first introduced, it was restricted to 10,000 places over four years (2,500 yearly caps).

“We recognise it's increasingly challenging to come up with the 10% deposit needed to achieve the dream of home ownership, and we'd like to see the Government getting more innovative and creative with solutions to address this.”

REGIONAL HOME GUARANTEE

“While the REIQ welcomes the new Regional Home Guarantee, with 10,000 places per year for migrants and anyone who has not owned a property for five years – it's disappointing to see that this initiative is restricted to either building or buying a newly built home,” Ms Mercorella said.

“By doing so, it fails to recognise the entry barriers for many first home buyers, particularly for young families for whom new construction isn't an affordable or practical option over established housing options.

“To have the desired impact, this initiative needs to be extended to established housing.

“Further, when it comes accessing the Regional Home Guarantee, Queensland is at a disadvantage due to our larger decentralised population.

“With a significant portion of our population living outside of our capital city, and high interstate migration to Queensland's regions, 10,000 places is simply too low for Queensland.”

HOUSING AFFORDABILITY

“It's clear that all three programs under the Home Guarantee Scheme – the extended First Home Guarantee (previously called the First Home Loan Deposit Scheme), the extended Family Home Guarantee, and the new Regional Home Guarantee have been introduced to address housing affordability nationally,” Ms Mercorella said.

“It's no secret that affordability is a hot topic sure to be on voter's minds as it increasingly becomes a prevalent issue all around Australia.

“We acknowledge that we can't just rely on the Federal Government to tackle housing affordability, and that's why the REIQ would support all levels of Government working together to develop a bi-partisan plan to address housing affordability and better planning for our future housing needs.”

DOWNSIZING

“This Budget misses an opportunity to encourage older Australians to sell the family home that is now too large and move into a better-suited sized home,” she said.

“There are thousands of under-utilised properties in Queensland and throughout Australia due to people living in their homes years longer than is suitable for their stage in life.

“High transactional costs are a key deterrent for this prolonged property hold – such as stamp duty alongside other costs associated with buying and selling, and more can be done to make downsizing a much easier financial decision for older Queenslanders, to significantly free up much-needed housing stock.”

ENDS

Media enquiries: Claire Ryan, Media and Stakeholder Relations Manager, The Real Estate Institute of Queensland M: 0417 623 723 E: media@reiq.com.au