First home buyers will have more choice thanks to expanded government scheme but some markets are likely to be pushed out of reach again, analysis has found.
The federal government is fast tracking an expansion to its Home Guarantee Scheme which allows those eligible to buy with a five per cent deposit and no lenders mortgage insurance.
Come October, the scheme will also remove income and place limits and raise property price caps across most regions.
Of the 4848 house and unit markets analysed by property data company Cotality, only about a third were accessible under the old scheme’s price caps.
This will expand to almost two thirds with the updated scheme, including 51 per cent of house markets and 93 per cent of unit markets.
Under the higher price caps, houses in 130 Adelaide suburbs will qualify, compared to just eight suburbs previously, while units in 153 Brisbane suburbs will qualify, up from 58.
Most regions will have a significant boost, bringing those caps closer in line with their median house values, Cotality economist Kaytlin Ezzy said.
“For those first-time buyers that have been struggling to get into the market for a while and seeing options dwindle as prices increase, these increased caps will definitely be something that they’re happy about,” she told AAP.
“It will mean that they are able to access the market that little bit earlier than they otherwise would have.”
She said the people will be able to get into a home earlier without having to save a 20 per cent deposit or didn’t have access to the “bank of mum and dad”.
“It helps level that playing field,” Ms Ezzy said.
But as more first-home buyers take advantage of the boosted scheme, demand will also rise, pushing about 100 suburbs outside the scheme’s caps by the end of the year.
Price caps in Sydney will lift from $900,000 to $1.5 million, Melbourne from $800,000 to $950,000 and Brisbane from $700,000 to $1 million.
Adelaide, Perth and Hobart’s caps will increase from $600,000 to $900,000, $850,000 and $700,000, respectively.
Darwin’s cap will remain unchanged at $600,000 while the ACT will have its cap increased from $750,000 to $1 million.
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