Australia launches deposit plan for first home buyers amid crisis

Sydney (Australia).- The Australian Government launched a plan this Wednesday that allows all first-home buyers to access the real estate market with a deposit equivalent to 5% of the property value, one of its main electoral promises, although experts warn that the measure may exacerbate pressure on the market. Known as the 'First Home Buyer Deposit Scheme', this scheme allows the Government to back the rest of the deposit, usually up to 20% of the value of the property, preventing the buyer from having to pay expensive mortgage insurance if they do not have sufficient funds.

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The program, which has no income limits or quotas, is accessible to all first-time buyers and, according to official estimates, those who access the scheme during its first year could collectively save around 1.5 billion Australian dollars (about 960 million US dollars) on mortgage insurance. The measure is part of the increasingly serious housing crisis facing the oceanic nation, characterized by extremely high prices, a lack of property supply, high construction costs, and growing demand. For its part, the Real Estate Buyers Agents Association (REBAA) warned that the measure has already driven up prices. "Properties that were selling for $750,000 last month are now selling close to $800,000," said the president of the entity, Melinda Jennison, in a statement, where she stressed that some buyers panicked and purchased homes without seeing them or paying above their value. The value of homes in Australia rose again in September, and some experts attribute this increase to the new government plan, which could also further boost prices in the coming months. According to the real estate research firm CoreLogic, national home values grew by 0.8% last September, the largest monthly increase since October 2023, marking their eighth consecutive rise. In the September quarter, property values rose by 2.2%, which translates to an average increase of 18,215 Australian dollars (about 11,300 euros) per dwelling. The national median value of a dwelling is now 857,280 Australian dollars (about 532,000 euros).