For Antoinette Pavithra, a single mother and social scientist, using the Family Home Guarantee through her bank, NAB, was the only way to get a foot in the door of a fast-growing market. last year.
“I wasn’t sure I could afford [a property] for a while if not for this grant,” Ms Pavithra said, adding that she had been saving for a deposit for a while but was still short.
After three months of looking for a place to live, she buys in Waitara, which she attributes to a stroke of luck.
“I don’t understand how anyone can buy in this market. I absolutely could not have qualified [without the scheme]said the 39-year-old researcher.
“Even trying to save that 20% and with prices appreciating as they are, it’s like chasing after a unicorn. Every time you think you’ve made the cut, prices keep going up again The competition is also fierce.
“Then you add the intersectional factors, if you’re a person of color, or if you’re an immigrant and you don’t have that intergenerational wealth, or if you have a disability, it becomes even more difficult. [to buy] with every social factor you add.
She said that without the bank’s help to access the program, she would have been shut out of the market. Units in her building are now selling for $100,000 more than she paid six months ago.
Dr Chris Martin, a researcher at UNSW’s City Futures Research Center, said while the scheme benefits individuals, overall it drives up property prices for first-time home buyers.
“I can understand the appeal of a program that gives them that extra security that they can offer the bank that allows them to borrow a little bit more and come in, to do that new extension of their purchasing power which will allow them to advance to the auction and sales,” said Dr. Martin.
“Having said that, that’s how it works. They set a new, higher price…The benefits of these programs mean they get to homeownership faster than they would, [but] the general effect is that it raises prices.
“I don’t want to hit people in this situation who have saved up to buy. Renting is too horrible, and that’s how it is. It shouldn’t be like this,” he said.
Governments should add more supply, including more affordable housing, rather than inflate the property market, he said.
“There will be someone else in a similar situation to [Ms Pavithra], a version of herself five years younger who isn’t as close and won’t benefit from the diet this time around. All other things being equal, prices will go that much further.
Mortgage Choice Penrith and Blaxland principal broker Rob Lees said many ambitious homeowners signed up for the program when it started in 2019 but it has since become almost redundant due to soaring prices in even affordable areas like Penrith and the lower Blue Mountains.
“There just aren’t a lot of people buying from him…it’s an entry-level market, but it’s now between $950,000 and $1 million. So it’s overpriced for a lot of people. We don’t even bother to reserve seats.
Australia Institute senior economist Matt Grudnoff said there are two ways to make housing more affordable.
“You can decrease the demand or increase the supply. Giving first-time home buyers more money increases demand, which means they can borrow more, they will come to auction with more money and the price will go up,” he said.
“It changes who can buy a house, but ultimately it increases the price of housing.
“Making housing affordable means house prices come down. Politicians want to give the impression that they want to do something about housing affordability, but they don’t really want to do anything about it.
Housing Minister Michael Sukkar said 60,000 Australians had already been helped to become homeowners under the Home Guarantee Scheme.
“We want to help even more Australians with their first home or a home they’ve built for their family, so we’re expanding the scheme,” he said.