The Victorian Government has announced a $1.1 billion expansion to its shared equity home buying scheme.
The supersizing of the Victorian Homebuyer Fund will triple the amount of support available and increase the number of available places from 3000 to 10,000.
Announced in October 2021, the original fund of $500 million has enabled more than 2000 Victorians to buy a home, with an additional 1000 applicants approved to start house hunting knowing they’ve secured a financial partner.
Through the shared equity scheme, eligible participants require only a five per cent deposit and the Victorian Government provides up to 25 per cent of the purchase price of the home, which reduces the size of participants’ mortgage repayments and also saves lenders mortgage insurance.
Participating homeowners can buy the government’s share at market value over time, with payments reinvested to help other aspiring homebuyers get into the property market.
The scheme is open to homes valued below $950,000 in Melbourne and Geelong, and $600,000 in regional Victoria.
Victorian Treasurer Tim Pallas said the fund had made a massive difference to home buyers, particularly those purchasing their first home, with more than half of the successful applicants under the fund coming from that category.
“The Victorian Homebuyer Fund has been popular for a reason – it helps people get into their own homes quicker with help from a secure partner,” he said.
“Thousands more Victorians will now be able to realise their dreams with this new injection.
“Combined with the First Home Owner Grant and first home buyer stamp duty relief, it can make a massive difference.”
More than 230 Victorian Homebuyer Fund purchasers are based in regional Victoria, including Krista and Ken Navarro who settled on their $595,000 home in the Ballarat suburb of Invermay Park in March.
The couple paid a five per cent deposit and benefited from a $148,750 homebuyer fund equity contribution.
They did not pay lenders mortgage insurance and as first home buyers also qualified for a stamp duty exemption, saving a further $30,000.
“We’ve always been diligent savers but it’s very difficult for families to buy now,” Mrs Navarro said.
“The scheme helped us get into a fantastic family home in Ballarat that’s ideal for our young twins, and we didn’t have to completely wipe our savings.”
Melbourne couple Harley Bougoure-Latchford and Samruai Raikuea credited the fund for helping them realise their homeownership ambitions, recently settling on their $901,000 home in the south-eastern suburb of Skye.
The couple paid a 9.5 per cent deposit and benefited from a $225,250 homebuyer fund equity contribution.
Because of the fund’s contribution, they did not pay lenders mortgage insurance, saving about $28,000.
“It’s our first home that we purchased – without the scheme, it wouldn’t have been possible for us,” Mr Bougoure-Latchford said.
“It was just fantastic to be approved.”
“We’ve got a pretty busy schedule with two full-time workers and kids’ schooling – the house came ready to go, nice and modern, with a backyard for the kids.”
The typical Victorian Homebuyer Fund member to date has paid an average deposit of $35,000 on a property purchase price of around $650,000, with the fund contributing shared equity of $155,000.
Last financial year the Victorian Government contributed $150 million to the Victorian Home Buyer Fund in shared equity.
