Brokers, first home buyers enjoy updated scheme

by Jayden Fennell & SSB
A unique opportunity for first home buyers is on offer with 35,000 new places now available on the First Home Guarantee Scheme.
Brokers, first home buyers enjoy updated scheme
On July 1, a new round of places was released on the First Home Guarantee Scheme for brokers to take advantage of and assist their first home clients in purchasing their first home. 

In order to be eligible, clients need to apply as an individual or couple, be an Australian citizen(s) at the time of entering the loan, be at least 18 years old, not be earning above $125,000 as an individual or above $200,000 as a couple, buying a home to live in rather than an investment property, and be a first homebuyer. 

Director of Newcastle brokerage Money Links Brenden Lowbridge (pictured) said he is making it known that the First Home Guarantee Scheme (previously the First Home Deposit Scheme) is the best incentive on offer for first home buyers. 

“This time around you not only have more places available where first home buyers can enter the property market with a 5% deposit, but higher price caps have been introduced which unlocks more locations across the country,” Lowbridge said. 

“Areas such as Sydney are now experiencing a slowing market. Despite many people seeing this as a bad thing, some can capitalise on the opportunity this provides.” 

Lowbridge said first home buyers were now offered a two-fold incentive. 

“Firstly, the unprecedented incentive from the Federal Government to assist first home buyers into the market in a less competitive buying pool. Secondly, there is more supply of stock available, giving eligible buyers the opportunity of more options to choose from,” he said. 

“These buyers really have the choice now of purchasing a home in a not so crazy, competitive market that we have seen in recent months.” 

Lowbridge said first home buyers should seize the current opportunity. 

“We are now in a climate where first home buyers can use the current market conditions (in most parts of the country) to their advantage and execute on a fantastic purchase,” he said. “In some instances, previously, the 90-day deadline was tight and if eligible buyers were unable to secure a property in time, they forfeited their place on the scheme and potentially were not eligible to re-apply again with the limited places available.” 

Yet Lowbridge said he was not receiving as many enquiries from first home buyers about the new places now available on the scheme. 

“We are putting this down to market sentiment,” he said. “Many are seeing this as a worrying and fearful time with interest rates rising. As rates increase, a client’s affordability decreases so this makes for a moving target.” 

Still, Lowbridge emphasised that the release of new places on the scheme was a good outcome for regional centres across Australia. 

“For example, Newcastle, the Central Coast and Wollongong were lucky enough to benefit from the same price cap of Sydney at $900,000 this time,” he said. “Moving forward, I think higher price caps will start to impact capital cities more which will bring buyers forward in the market. It is a buyer’s market in most property markets across Australia now.” 

Lowbridge's advice to other brokers who might be navigating the scheme was to get in early and understand income and postcode thresholds. 

“As brokers, we need to be 100% educated on what income is required and what price thresholds are,” he said. “Make sure you learn the application process and understand how different lenders work with their processes. Some lenders require a scheme spot reserved before the client’s application is submitted, where others reserve the spot after submitting the application. 

“All lenders require a client’s most recent notice of assessment from their tax return. Some people do not think about finalising their taxes in July, so make sure your clients are on top of this before you submit their application.” 

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