With traditional methods of saving a deposit and purchasing a first home seems to be out of reach for a growing majority, the federal and state governments are looking at ways to address this issue. If you are interested in speaking to one of our consultants about this scheme, you can talk to them 7 days a week on 1800 184 284 or book a call. They will be able to help you find builders, land estates and house and land packages that fit your requirements and budget.
How Does The Shared Equity Program Work?
Across Australia, state government are looking at the idea of providing a helping hand to people by going in as partners with a prospective property owner and co-purchasing the house as a shared equity agreement. In Victoria, the premier has announced that there will be a $50 million HomesVic pilot program, giving 400 people the chance to co-purchase a home with the state government. The Victorian government will then take an equity share of up to 25 per cent in the property – which in turn reduces the deposit a first home buyer needs. This could be the perfect way for you to get into your first home sooner because you simply don’t have to save as much for your deposit.
‘As rent keeps climbing, it’s getting harder and harder for Victorians to save for a deposit,’ Mr Andrews said as he announced the policy. ‘By co-purchasing these properties, we’re helping them to get out of the rental market and into their own home sooner.’ The scheme also reduces the size of home loan people would need to repay.
Treasurer Tim Pallas said, “Not only do first home buyers deserve a chance to enter the market, but they also deserve more choice about where they live”. The HomesVic scheme allows people to purchase a home if they show they can meet mortgage repayments, but can’t save a large enough deposit.
The Victorian Government will contribute funds to make up the shortfall in the deposit. The state government then owns up to 25 per cent of the property going forward, which allows the home buyer to not pay mortgage insurance. When the properties are sold, HomesVic will recover its share of the equity and reinvest it in other homes. On the plus side, there is no time limit placed on the sale of the home. The HomesVic program will be introduced in January 2018 and the government will co-purchase up to 400 homes. Victoria is not the only state to put such a program in place.
Are You Eligible For The Shared Equity Program?
Singles earning less than $75,000 or couples earning less than $95,000 will be able to access this program, and it applies to the purchase of new and existing homes. There is still the requirement to have at least a 5 per cent deposit, and they still must meet the bank’s requirements to get a mortgage for the remainder of the property value.
The Western Australian government has a similar program called Shared Start, which has been running since 2016. The details of this scheme are even more lenient, with a low deposit of $2,000 or 2 per cent of the purchase price required (whichever is greater) for first home buyers.
Purchasing House and Land Packages With Shared Equity
The federal government have also been looking at a national shared equity scheme to tackle housing affordability, and there are pressures being put on the NSW, QLD and SA governments to put similar schemes in place. There are also other schemes run by the states that tackle the housing affordability issues in different ways. Schemes such as the “Housing Finance Loan” in QLD provide low-interest loans to people that are having trouble getting first home loans from traditional means. You can see what is offered here. This could be the assistance you need to purchase a new home or start building your dream home sooner.
Housing affordability may be the defining issue of the next generation. Governments on all levels are aware and are taking proactive steps to address this and allow everyone to share in the Australian dream of owning their own home. iBuildNew can further assist you in helping you get into your new home sooner. We can help you compare builders and house designs so that you get the best bang for your buck, or even help you secure house and land packages in exciting new areas that have huge growth potential.
Whatever you are looking for in a new home, make sure you speak to an expert. Our independent consultants are here to help you 7 days a week and assist you with all of your queries regarding the new home building process or even investment opportunities. Call them on 1800 184 284, or book a call now.
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