Regional First Home Buyer Guarantee

Announcement date
28 September 2022

Link to announcement
https://www.nhfic.gov.au/media-resources/media-releases/10-000-places-available-from-saturday-under-the-regional-first-home-buyer-guarantee/

Problem being addressed
Housing markets in regional Australia have become increasingly unaffordable for first home buyers. The impact of recent increases in house prices in regional Australia is not felt equally by all households.  Higher house prices necessitate higher average loan amounts for regional first home buyers, and the increase in prices has increased the time it takes to save a deposit, thus creating a barrier to homeownership.

Proposal
The purpose of the National Housing Finance and Investment Corporation Investment Mandate Amendment (Regional First Home Buyer Guarantee) Direction 2022 is to amend the National Housing Finance and Investment Corporation Investment Mandate Direction 2018 to establish the Regional First Home Buyer Guarantee (RFHBG). The RFHBG is an election commitment. The RFHBG is designed to support certain eligible first home buyers living in regional areas to purchase a home in a regional area with a deposit of as little as five per cent. Home buyers (or at least one borrower when applying as a couple) must have lived in the regional area or adjacent regional area they are purchasing in, for the preceding 12-month period to the date they execute their home loan agreement.  

Assessed RIS outcome
Adequate

Assessment comments
The RIS is an addendum to the ‘Home Guarantee Scheme’ regulation impact statement (available here) and contains analysis with respect to the incremental impacts associated with the proposal. The RIS addendum is considered to be Adequate but would have benefitted from a less constrained timeframe between the first and second pass assessments of the RIS. The RIS addresses the seven RIS questions and follows an appropriate policy development process commensurate with the significance of the problem and magnitude of the proposed intervention. 

Regulatory burden
The Department of the Treasury did not estimate the regulatory costs in this Addendum Regulatory Impact Statement. The regulatory costs are expected to be almost identical to the Regional Home Guarantee which were assessed as part of the Home Guarantee Scheme regulation impact statement.