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Scott Morrison's $500m plan to assist First Home Buyers

The Coalition has won the 2019 Federal election, putting Scott Morrison in power, who has plans to re-energise the Australian property market.

The Morrison Government have made it clear that they support homeowners and understand the large sacrifices and hard work it takes to pay a mortgage.

To offer support to young Australians who have aspirations of entering the property market, last week a new deposit scheme was announced which would further assist first home buyers.

The ‘First Home Loan Deposit Scheme’ will commence on 1 January 2020 and will be open to singles earning less than $125,000 a year and couples earning less than $200,000 a year to get into the housing market for the first time. Support for borrowers could include guaranteeing approved applicants the additional loan amount taken out by the first home buyer to cover the difference between the amount of the first home buyer's deposit and 20 per cent of the value of the property.

More details about the First Home Loan Deposit Scheme:

- Available to eligible first home buyers who have been able to save for a deposit of at least 5% up to 20%. This will mean that eligible first homeowners will be able to purchase their own home years earlier than they would normally be able to do.

- Available to 10,000 first home buyer loans each year

- Borrowers would not be required to purchase lenders mortgage insurance saving them approximately $10,000

- The scheme would give preference to smaller banks and non-bank lenders, who will do normal checks on the borrowers to make sure they can meet their repayments.

- Support will be targeted to entry properties, with a maximum loan size determined on a regional basis, reflecting the different property markets across Australia.

- The first home buyer will be able to use the Scheme in conjunction with the FHSSS and State or Territory first home buyer grants and duty concession

As well as stating what they will do, the Coalition have also made it clear that they “will NOT hit Australian residents with new taxes on housing. Guaranteed”.

A lot of investors are breathing a sigh of relief as the Labor government proposed increasing the capital gains tax rate by 50%.

The new PM stated “When you work hard, save and invest for the future, the Morrison Government believes you should be supported…That’s why the Morrison Government is backing first home buyers, home owners and Mum and Dad property investors”.

People are anticipating the housing market to pick up by the end of the year. This change also leans heavily on the banks, and depends on if lending restrictions are loosened in the coming months.

MDP’s Opinion:

While anyone who thinks they can predict the exact timing of when home prices will rise and fall, is simply guessing;

One thing I do believe is this election result will lead to a much quicker return to stability in our property markets and certainty among the still solid volume of potential home owners and investors we continue to see on a daily basis...

What are your thoughts on who won and lost and why? And how do you think it will impact our property market?

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