Is the 5% Deposit Scheme pushing first home buyers’ dreams out of reach? | The Business | ABC NEWS
A six-month review by Cotality of house prices after the introduction of the government’s expanded 5% Deposit Scheme shows it is fuelling competitive tensions at the lower end of the property market, so much so, that it is likely to gradually lose its stimulatory power. Cotality’s research director Tim Lawless says homes eligible for the scheme rose 6.7 per cent nationally, compared to a 3.6 per cent rise in values for properties above the price cap. He says while the scheme has helped first home buyers get into the market, “it’s done nothing to address the underlying challenges of affordability, like low supply levels.”
“What it’s doing is a bit of a sugar hit for values…it’s placing further upwards pressure on prices … For a first home buyer (who) comes into the market, say, a year after this scheme has expanded, they’re going to find it all the harder to get into the housing market.”
In cities, such as Sydney, where values have fallen for houses above the price cap, those below the price cap – and therefore eligible for the 5 per cent deposit scheme – have gone up. In Perth, Cotality’s data shows values that fall within the scheme have risen 18.2 per cent over the last six months.
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