In a bid to improve the affordability of homes in Australia's booming regional property markets, the Federal Government has announced a new home guarantee scheme targeted at the regions.
Under the new Regional Home Guarantee announced ahead of the 2022 Budget, the Government will guarantee eligible homebuyers to purchase or construct a new home in regional areas.
The Government will support 10,000 people a year by guaranteeing part of the buyer’s home loan, which will mean they can put down a 5 per cent deposit without paying pricey lenders mortgage insurance.
As well as first-home buyers, the scheme will also be open to people who have not owned property in the past five years, as well as permanent residents in a bid to attract more migrants to the regions.
The scheme will require legislation to be passed before it can be implemented.
More spots in first home buyers scheme
The Government will also bump up the number of first-home buyers it will support with home guarantees by 25,000.
Under the scheme, first-time home buyers are able to purchase a property with only a 5 per cent deposit, with the other 15 per cent of the loan guaranteed by the Government.
Before, the Government was offering 10,000 places each year. It will now offer 35,000.
The Morrison Government said the scheme had particularly supported women and frontline workers.
One in five guarantees were issued to essential workers, according to a government statement, with almost 35 per cent being nurses and 34 per cent teachers.
The Government also said 52 per cent of guarantees went to women, which was above the market average of 41 per cent women.
Speaking to ABC radio this morning, Finance Minister Simon Birmingham rejected criticism that the home guarantee schemes pushed up house prices and worsened housing affordability.
“These are measures about supporting home buyers, particularly young Australians,” he said.
“We have again achieved growth in areas of first-home ownership in Australia, turning around declines that we'd seen during the years under Labor.”
Shadow Treasurer Jim Chalmers criticised the Government for “copying” Labor’s scheme - released earlier this month - for helping regional home buyers.
In last year’s Budget, the first home buyer’s scheme was extended and a scheme targeting single parents was added.