“Under the home guarantee scheme, 60,000 Australians have already been supported into home ownership. We want to help even more Australians into their first home or a home that they’ve built for their family, which is why we are expanding the scheme,” Sukkar said.
A concern of Valencic’s is that the high price of houses does not leave much room for the buffer that the RBA recommends. Nor it is likely she would have leftover cash to renovate the fixer-uppers that are in her price range. Eliza Owens, head of Australian research at CoreLogic, said she doesn’t think there’s a heightened risk of first-home buyers defaulting on their mortgage under the scheme. But she said it’s important people understand the risks, particularly as the scheme targets younger people who may have less understanding of how interest rates work.
People need to rigorously assess if they can ride out the peaks and troughs of the market once they buy, Owens said.