LEON COMPTON:
The federal government's looking at a policy that would allow Australians to buy a home with as little as 2 per cent deposit. How will it work? Let's find out. Julie Collins is the Housing Minister and joins us this morning. Julie Collins, good morning to you.
JULIE COLLINS:
Good morning, Leon, and to your listeners today.
COMPTON:
Minister, tell us about the Help to Buy scheme.
COLLINS:
Yeah, well, Help to Buy is what's known as a shared equity scheme. So, this is whereby people can purchase a property and they are able to borrow less because the government is an equity stakeholder in their property. So, we're talking about 30 per cent for existing properties and 40 per cent, up to 40 per cent for new properties. So, it would also encourage more supply to come online. We're talking about with as little as 2 per cent deposit. We have targeted this program, we have purchase price caps, we have income caps, and it's really about making sure that we target it so we don't increase house prices, but that we allow people, particularly low middle income earners who could service a mortgage, to be able to get into a home.
COMPTON:
So, what are the eligibility criteria? Is this for first home buyers only?
COLLINS:
No, it's for anybody that doesn't currently own a home so they will be able to get in to the market. We're talking about in Tasmania, in Greater Hobart, a cap of $600,000, and in regional Tasmania and other areas of Tasmania, $450,000. And there are various caps depending on where you live around the country. We're talking about only 10,000 places a year. And we're talking about income caps of $90,000 for singles and $120,000 for couples, or two people that purchase
COMPTON:
10,000 Australians a year. Meaning potentially 200 Tasmanians a year would be rationed into the scheme. Is that your maths?
COLLINS:
So, the way that we would do it is we would, in the first year, trial it and do a per capita allocation for the first nine months of the year. And then if there are areas that haven't taken up, they would go into a central pool and be available to any Australians that wanted to access the scheme. This is similar to other schemes that states and territories do run around the country, but would be the first national scheme. The Tasmanian state government does run a similar scheme in Tasmania, which I think helped about 150 people into a home last financial year.
COMPTON:
Is your modelling that about 200 Tasmanians a year would get involved or get access to the scheme?
COLLINS:
We do think that it'll be very popular, Leon. We do think that there are a lot of people, particularly renters, who are paying high rent, that could save the 2 per cent deposit that would easily be able to service a mortgage and want to get into their own home. Obviously, as the federal government, as an equity stakeholder in the property, once you sell the property, you would need to repay the federal government our percentage of it, and or you can buy it out in lots of 5 per cent, as your income allows you to do that. So, over time, you could, for instance, purchase the government share off the government.
COMPTON:
Or when you sell the property.
COLLINS:
Or when you sell the property. That's right.
COMPTON:
That 30 per cent equity stake that the federal government would take in the property would then return with whatever capital growth has accrued to the feds.
COLLINS:
That's exactly right. So, essentially, on the title, we would be a second mortgagee.
COMPTON:
Let's talk about red tape. I know that some real estate agents roll their eyes when they find out that the person wanting to buy a property, putting an offer in on a property, will need to go through a lot of bureaucracy to seal the deal. How will you make this red tape friendly so that real estate, so that people have a competitive chance with their bid to get through this fast and get contracts signed off?
COLLINS:
Well, obviously, we've been having a lot of discussions, Leon, with lenders, so it will be run by Housing Australia through their panel of lenders. The panel of lenders has a lot of credit unions, building societies, small banks and some of the big banks on that lenders panel. And they've been working with them for some time on how this Scheme would run nationally, which is why we want to run it nationally, because the lenders say that this will be easier in terms of that. And we've also found our experience with the other government scheme, the Home Guarantee Scheme, and we've helped now 86,000 people into their first home, and indeed we've now opened that up to people that haven't owned a home for more than a decade. That is not the experience. People don't seem to have any issues going through their lender when they want to access that government scheme, so we don't expect that there will be significant issues because we have thought about this very carefully and been working with the states and territories, but also with lenders.
COMPTON:
When will it start?
COLLINS:
Well, we need every state and territory to pass some legislation to give us a very narrow referral to run the program. All the states and territories have agreed they will do that early next year, so we're just waiting to hear from the states and territories when they expect to do that, and then we'll be able to announce a start date so it will be next year.
COMPTON:
Mornings around Tasmania. Julie Collins, Federal Housing Minister, is our guest this morning, and you can join us, too. 2 per cent deposit potentially to buy a house. So, if you're looking at a $600,000 house, let's hope that my math is okay. You'd be looking at $12,000 potentially as a deposit, which is a lot less than you might need if the bank is asking for 10 or 20 per cent to convince them of your bona fides. Minister, while we have you there, yesterday, you announced 38 new homes in Hobart for women over 55 who are at risk of homelessness. Can you tell me where that will be and how that will work?
COLLINS:
Yeah, so that's in our Argyle Street is in a partnership with St Vincent de Paul Society and it's where their charity shop currently exists and their emergency relief centre. So, this will be able to home, there'll be 38 new homes for women over the age of 55 who are at risk of homelessness. So, these people come off the waiting lists. We expect work to begin early next year and to be complete by late December 2025. This funding is coming straight out of the federal government's Social Housing Accelerator, which is $2 billion nationwide. And we've got $50 million coming into Tasmania, which we expect will deliver around 110 new homes. It's also, obviously running through Homes Tasmania in partnership with the State Government.
COMPTON:
So, tell me about the details, how's it going to work. We're talking about apartments here at the Vinnies site. So, just opposite the big Toyota dealership. If people don't know in Argyle Street, this will be apartments?
COLLINS:
Yes, that's right.
COMPTON:
How much are you paying for the federal government?
COLLINS.
So, we're investing $13.36 million for the $16 million project. So, this project had been done by St Vinnies and proposed, and now the federal government is in a position through the federal government Social Housing Accelerator where we can fund this. This is just one of many projects we expect to be able to announce in coming weeks and months. We're talking about 110 homes, additional homes funded by the federal government. This comes on top of the funding that we provide to the State Government each and every year to build more homes, and comes on top of the Housing Australia Future Fund money and comes on top of the National Housing Accord funding, all of which will see more homes built in Tasmania. We expect out of Housing Australia over the five years to build more than 1200 homes in Tasmania, where the federal government has played a role.
COMPTON:
It'll be very interesting to see. Interesting site. Obviously, lots of people know what it's like to drop stuff off at Vinnies in Argyle Street. Be interesting to see how those apartments on top and around add to that. Thanks for talking with us this morning, Minister.
COLLINS:
Appreciate it, Leon. Thank you.