more first home buyers accessing home guarantee scheme
A growing number of first home buyers are accessing the Home Guarantee Scheme. Image: Canva.
  • Proportion of first home buyers supported by the HGS increased to nearly one in three.
  • The number of guarantees issued was around 41,700.
  • Just over 12% of total guarantees issued to date have transitioned out of the Scheme.

A growing number of first home buyers were supported by the Housing Guarantee Scheme (HGS), according to the fourth annual Home Guarantee Scheme Trends & Insights Report from NHFIC, which covers data across from the First Home Guarantee (FHBG), Family Home Guarantee (FHG), and Regional First Home Buyer Guarantee (RFHBG) for 2022-2023.

“The broader macroeconomic environment with rapidly rising interest rates has substantially decreased mortgage serviceability with flow on effects for affordability and this has led to first home buyers relying more heavily (proportionally) on the Scheme than in previous years,” said NHFIC head of research, data and analytics, Hugh Hartigan.

In 2021-2022, the Scheme’s share of the first home buyer market was one in seven. The proportion grew to nearly one in three in 2022-2023.

Following the expansion in the number of places available in the Scheme, guarantees issued grew from 32,500 in 2021-22 to 41,700 in 2022-23.

“The report demonstrates how each year the Scheme is helping more Australians, including key workers and those living in regional areas, buy their own home sooner, and it’s great to see the increasing number of participants who have built up enough equity to transition out of the Scheme,” said NHFIC chief program officer home ownership, Jennifer Chew.

The Scheme issued around 7,721 guarantees to key workers across 2022-23, rising 37% from 5,650 in 2021-22. For the 2022-23 period, more than one in four of all guarantees under the FHBG were issued to key workers such as teachers, nurses, and social workers.

The RFHBG was launched in October 2022 and helped more buyers into home ownership in regional areas. Around 10,860 or more than one third of all HGS guarantees were issued to buyers in regional areas in 2022-23, rising from the 7,390 guarantees issued in 2021-2022.

A growing number of younger buyers

The report also found that younger buyers are making up a greater proportion of Scheme participants each year since its inception.

In 2019-20, people under 30 comprised around one third of places under the FHBG and RFHBG. In 2022-23, under thirties comprised more than half of all places under the FHBG and RFHBG.

Interest from the 18 to 24 cohort has also risen substantially, from 3% of all purchases in the FHBG in 2019-20 to 14% of all purchases in the FHBG in 2022-23.

Transitioning out of the Scheme

Over 9,700 households have already transitioned out of the Scheme; this figure represents just over 12% of total guarantees issued to date.

Most of these buyers accumulated sufficient equity to achieve a Loan to Value ratio (LVR) of less than 80% and therefore no longer require a guarantee.

The NHFIC said this demonstrates the temporary nature of support offered through the HGS, with the Scheme acting as a gateway to home ownership.

Furthermore, the report found that arrears under the Scheme are low, under 0.1%, and are below broader market benchmarks for high LVR lending.

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