The Victorian government is launching a $ 500 million fund to help about 3,000 people buy their own homes.
The Victorian Homebuyer Fund will be available to individuals over the age of 18 who have no interest in real estate and who meet income limits.
Under the scheme, home buyers must have a 5 percent deposit, while the state government will pay up to a quarter of the purchase price in exchange for a similar share of the property that owners can buy over time.
Aboriginal and Torres Strait Islanders will need a 3.5 percent deposit, and the government will contribute up to 35 percent.
The value of the property must not exceed $ 950,000 in Melbourne and Geelong or $ 600,000 in the rest of the state.
It is a payment of up to $ 237,500 for the metro regions and $ 150,000 in regional areas.
Applicants must earn $ 125,000 or less gross income for individuals or a maximum of $ 200,000 for joint applicants.
Treasurer Tim Pallas says the fund is not just for the first home buyers and will be available to people who have previously owned a house.
“We want to help people who otherwise would not be able to access the real estate market to be able to do so by acquiring a home,” he told reporters Friday.
The Corelogic index of house values shows that house prices in Melbourne have risen by 15 per cent in the past year and 0.8 per cent in September alone.
Continued low mortgage rates, falling unemployment and the accumulation of savings through the COVID restrictions last year are just some of the factors that have sent house prices through the roof.
Federal government initiatives such as the First Home Loan Deposit Scheme and the New Home Guarantee have also contributed to strong demand.
But Pallas rejected the proposal that the scheme would continue to push prices up in an already hot market.
“We do not put more money in people’s pockets, in fact, what we do gives them the opportunity to participate in a competitive market,” he said.
The government would recover its share of equity at market value when a property was sold if owners had not already chosen to buy out the state’s interests.
This money would be returned to the fund to help other prospective buyers.
Pallas said the fund would allow buyers to afford housing “around the median price,” and although the government would oversee the scheme, it would effectively use banks as partners to assess borrowers’ ability to repay mortgages.
“We are not talking about buying mansions, we are talking about people getting into adequate resources and provided homes,” he said.
You can find out more and apply for the scheme here.
The homebuyer plan has been launched, just as the Australian Prudential Regulation Authority is tightening lending rules.
APRA has told banks that they want them to assess new borrowers’ ability to meet their loan repayments at an interest rate that is at least three percentage points above the loan product interest rate they are applying for.
Nationwide, house prices have been rising at the fastest rate in more than 30 years, with CoreLogic figures showing the value of Australia’s housing market has now exceeded $ 9 trillion.