The government of Victoria will soon co-purchase houses with some 400 first homebuyers. Under the shared equity scheme called HomesVic, first homebuyers in the low-income group will be able to apply to cover up to a quarter of their mortgage. This will be available to those planning to buy in certain growth areas and regional centres.
Last month, the state government of Victoria said it would carry out this scheme taking an equity share of up to 25 percent of each home. The government would then recover its equity share when the properties are sold.
This initiative worth $50 million will lower the size of the first homebuyers’ loans and thereby reduce the amount of deposit they would have to save. The target market of this scheme are the single first homebuyers with an annual income of less than $75,000 and couples earning less than $95,000.
Priority areas included in this government program are the 85 suburbs in Melbourne, seven fringe towns and 130 regional towns and suburbs. Some of the Melbourne suburbs in the list are Box Hill, Broadmeadows, Dandenong, Epping, Fishermen’s Bend, Footscray, Fountain Gate, Frankston, LaTrobe, Monash, Pakenham, Parkville, Ringwood, Sunshine and Werribee. Not covered are the bayside suburbs, the inner eastern suburbs and some areas of the inner north.
Among the regional centres included are Ballarat, Bendigo, Castlemaine, Geelong, La Trobe, Mildura, Seymour, Shepparton, Wangaratta, Warrnambool and Wodonga. According to the Victorian state government, the growth areas chosen were those with a high demand for housing and access to employment and public transport.
The shared-equity scheme was first announced in March 2017. Its main objective is to address the housing affordability issue in Victoria and so far, acting Treasurer Robin Scott said there is already a significant interest shown in this HomesVic initiative.
For her part, Dr. Katrina Raynor who’s an expert on housing affordability from the University of Melbourne noted that while the scheme may not have a huge impact as it will only accommodate 400 people, it has a potential to be scaled up over time.
Victoria has seen a rise in its first homebuyers particularly after new financial incentives were introduced. These include the stamp duty cuts and the doubling of first homeowner grants in the region. Also last November 2017, the Australian Bureau of Statistics noted a total of 3,527 loans were taken out by first homebuyers considered the highest figure in a month since 2009.
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By Wendy Chamberlain
Copyright 2018 | All Rights Reserved
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