Equity position of Home Guarantee Scheme buyers improving: NHFIC

The National Housing Finance and Investment Corporation (NHFIC) in collaboration with the Commonwealth Bank (CBA) has released data and insights into the first home buyer market.

The analysis by the bank and organisation found that despite average dwelling prices falling for a large portion of last year the equity positions of first home buyers as part of the Home Guarantee Scheme (HGS) continued to deliver improvement.

The research showed that HGS first home buyers achieved an average equity gain of approximately $82,000 since 2020.

The improvement came while the deposits for home buyers under the HGS remained relatively unchanged, only rising $1,200 in 2023 compared to the previous year, while overall first home buyers deposits increased by more than $50,000 in the same period.

NHFIC head of research Hugh Hartigan said: “Despite the challenging interest rate environment and dwelling price falls last year, it is encouraging that the (average) equity position of Home Guarantee Scheme participants appears to be holding up.

“It is also interesting that deposits for first home buyers outside of the HGS have risen so strongly, which may indicate they have other ways of supplementing their savings.”

The analysis also revealed that the HGS supported more women as a proportion of single borrowers relative to the general first home buyer market, making up 54 per cent of the HGS compared to only 47 per cent.

It also showed that the average gross household salary income for those participating in the HGS was $107,946 compared to total first home buyers, which was $117,025 and also reflected the total amount needed by first home buyers, $628,727, combined both deposit and borrowed compared to only $503,311 by HGS participants in 2023.

The analysis conducted by CBA and NHFIC also found the average loan amount under the HGS grew only 4.7 per cent since 2020, while the broader first home buyer market increased by 13.4 per cent in the same period.

NHFIC chief program officer home ownership Jennifer Chew said: “NHFIC is proud to work collaboratively with major banks to further understand the value of the Home Guarantee Scheme. This research demonstrates the benefits of the HGS in helping more Australians into homes.

“We are proud to have helped over 100,000 people into homes, and with the recent expansions to the eligibility criteria and participating lender panel, we hope to continue to help many more.”

The analysis comes after the government previously announced it still had places for eligible home buyers to take advantage of Home Guarantee Schemes.

Due to the shortfall, from 1 July the government extended the eligibility criteria to give more people access to the scheme, with friends, siblings, and other family members, to be eligible for joint applications under the First Home Guarantee and the Regional First Home Buyer Guarantee.

[Related: Home Guarantee places ‘still available’]