Revolutionizing Homeownership: The Enhanced First Home Guarantee Scheme
- February 27, 2024
The quintessential experience of cohabiting with friends during our early adulthood is a cherished memory for many. For those who’ve forged unbreakable bonds, the natural progression often involves considering the dream of joint homeownership. And with recent updates taking effect on July 1st this year, this aspiration has become a reality within easier reach.
Enter the First Home Guarantee (FHG), a pivotal component of the Home Guarantee Scheme, which has undergone a remarkable makeover. Now, it enables two individuals to embark on their property ownership journey with a mere 5 percent deposit, eliminating the lender’s mortgage insurance need. Traditionally, buying a home demanded a formidable 20 per cent down payment, a financial feat that could span several years. Yet, the revamped FHG offers a lightning-fast route to enter the property market.
Notably, the FHG was initially tailored exclusively for first-time buyers partnering with their spouses. However, the winds of change have swept through the eligibility criteria. Today, the FHG welcomes not only romantic partners but also dynamic duos comprising siblings, parents (provided they haven’t held property within the last decade), and even close-knit friends. The message is clear: homeownership is now a shared endeavour.
Per the latest Domain House Price Report, over 100 suburbs in major Australian cities flaunt a median price tag below the $500,000 benchmark. With a 5 percent deposit requirement for a $500,000 property, each partner’s contribution dwindles to a mere $12,500.
To navigate this price range effectively, prospective homeowners often opt for units, a decision that can significantly narrow down the list of viable suburbs. Canberra presents an intriguing trio of suburbs within a 10-kilometer radius of the CBD, offering apartments for less than $500,000: Gungahlin, sporting a median unit price of $450,000; Bruce, where units beckon at $465,000; and Belconnen, where the median hovers at $494,000.
Meanwhile, Sydney unfurls a dozen potential suburbs where two enterprising souls can secure a unit for a median price of $500,000 or less. Among them, the closest to the CBD include Auburn, Rosehill, and Harris Park, all situated within a 20-kilometer radius.
Melbourne, ever the competitor, outpaces Sydney with a surplus of suburbs accessible through the FHBG scheme for co-buyers. Remarkably, more than half of these lie within a 20-kilometer radius of the CBD. Consider Carlton, for instance, with its median price tag of $310,000, resulting in a trifling $7,750 per person for the required 5 percent deposit split.
The recent broadening of eligibility criteria, encompassing not just spouses but siblings, friends, permanent residents, and individuals disconnected from Australian property ownership for over a decade, ushers in a new era of possibility for aspiring homeowners.
