The increased price caps of up to $250,000 aim to expand the number of people who are eligible for the Home Guarantee Scheme.
In its current configuration, the scheme allows 50,000 aspiring homeowners to purchase a home with a deposit of just 5% without needing to pay lender’s mortgage insurance (LMI).
Outlined as a key element to the Federal Budget for 2022-23, the Home Guarantee Scheme was expanded from 20,000 to 50,000 to provide the opportunity for more first home buyers to enter the property market.
Prime Minister Scott Morrison said the Government aims to build a stronger future for Australians by making home ownership easier and making more properties eligible for the scheme.
“Saving to buy a house has always been hard work and we know as prices have increased it’s been getting harder,” the Prime Minister said.
“People are cutting years off the time they’d need to save a deposit for a home because of this program.
“These higher price caps will help more people realise their dreams and lock in a stronger future for themselves.”
These increases are as follows:
| Location | 2021-22 Price Cap | 2022-23 Price Cap |
| NSW | ||
| Capital city & regional centre | $800,000 | $900,000 |
| Rest of state | $600,000 | $750,000 |
| QLD | ||
| Capital city & regional centre | $600,000 | $700,000 |
| Rest of state | $450,000 | $550,000 |
| VIC | ||
| Capital city & regional centre | $700,000 | $800,000 |
| Rest of state | $500,000 | $650,000 |
| SA | ||
| Capital city & regional centre | $500,000 | $600,000 |
| Rest of state | $350,000 | $450,000 |
| WA | ||
| Capital city & regional centre | $500,000 | $600,000 |
| Rest of state | $400,000 | $450,000 |
| TAS | ||
| Capital city & regional centre | $500,000 | $600,000 |
| Rest of state | $400,000 | $450,000 |
| ACT | ||
| Capital city & regional centre | $500,000 | $750,000 |
| NT | ||
| Capital city & regional centre | $500,000 | $600,000 |
Source: National Housing Finance and Investment Corporation
PRD Chief Economist Dr Diaswati Mardiasmo said the extension and increase is good news but that it might not actually address affordability.
"However on the other side these schemes do add to the demand level and currently our supply system is still extremely challenged," Dr Mardiasmo told Savings.com.au.
"It is a catch-22 as whilst it can assist those who are in the edge of buying, it also adds to demand, which means without supply catching up it will push up prices.
"There is no real solution offered yet when it comes to increasing housing supply, and although much of this does sit with the state and local councils, there is a need for better coordination between all levels of government to improve the balance of supply and demand."
Aussies relying on government schemes more than ever before
New research from Great Southern Bank has revealed budding first-home buyers are increasingly relying on government schemes to help them achieve their dream of owning a home.
In a survey of 1,500 respondents, Great Southern Bank found 72% of first-home buyers will turn to use government scheme support in the near future, compared to 54% who purchased in the past five years.
Further, Great Southern Bank revealed 77% of homebuyers in Western Australia were the most likely to make use of schemes and support, followed by Tasmania at 75%, NSW at 72% and the ACT at 71%.
Homebuyers in Victoria were the least likely at 60% followed by Queensland and South Australia at 67%.
Great Southern Bank CEO Paul Lewis said if house prices are making it more difficult to buy, Government, banks, and other stakeholders must work harder to help make home ownership a reality for younger Australians.
"There is still more to be done to address the challenges facing first home buyers but there is no silver bullet," Mr Lewis said.
"We are talking to political stakeholders to advocate for a range of measures to benefit homebuyers, including support for lending for alternative housing forms such as tiny homes, container homes, and demountables.
"We also see the promotion of innovative home ownership models, such as shared equity and rent-to-buy schemes, playing a part in helping first home buyers."
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