The top postcodes First Home Guarantee users are flocking to

The number of Australians using the First Home Guarantee scheme has surged despite rising property prices and multiple interest rate hikes. 

A new report by Housing Australia, formerly known as the National Housing Finance and Investment Corporation (NHFIC), has revealed the number of guarantees issued in 2022-23 increased by 32,500.

Housing Australia offers various schemes to help Australians enter the housing market. A common one is the First Home Guarantee (FHBG), which is part of the Home Guarantee Scheme and allows buyers to purchase a home with a 5 per cent deposit without needing to pay lender’s mortgage insurance. 

In 2023-23, one in three first-time buyers used the scheme,  a massive jump from the one in seven who used it in 2021-22.

“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,” says Housing Australia head of research, data and analytics Hugh Hartigan.

Domain chief of research and economics Dr Nicola Powell says the user uptake of the scheme doesn’t surprise her.

“[Housing Australia] upped the places, and I would probably say a scheme like that is even more grossly needed under today’s scenario because first-time home buyers have significantly lower borrowing capacity,” she says. 

“We’ve seen prices rise, so what it means is there are some first-time home buyers who will be enabled to get access to the market sooner by accessing a scheme like this, and then they are in the market and they are benefitting from capital growth.”

“It helps them access the market sooner, and it’s a particularly poignant period of time where you see markets bottom out, and you kind of want to lock in an area where prices may be below the peak, but they are moving higher. So it gets you on the front foot of equity growth and capital growth.”

The report identified the states’ top postcodes where first-time buyers are purchasing. 

The postcode with the most guarantees in NSW is 2170, encompassing the Sydney suburbs of Liverpool, Moorebank and Warwick Farm.

“What I find that attracts the first-home buyer market to Liverpool is there is an abundance of good quality apartments that are up for sale that are within the parameters of the first-time home buyer grant,” says local agent Aleksander Stanojevic of Ray White Wetherill Park.

Liverpool – 27 kilometres from the Sydney CBD – has a unit median price of $480,000 and a house median price of $880,000.

SOLD - Price Withheld

905/311 Hume Highway, Liverpool NSW 2170

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Stanojevic says a similar-sized apartment or house closer to the CBD will be in the millions, hence why first-time buyers turn to the south-western Sydney suburb as their foot into the property market.

The median price of a Newtown apartment – five kilometres from the CBD – is $680,000, and a house is $1.625 million.

“[Buyers will] be able to find smaller three-bedroom homes and a decent box of land [in Liverpool],” he says. “They’d be able to buy if they want to spend on that top sort of level. Or spend a bit less and keep a bit more for themselves by buying a duplex townhouse and saving quite a bit of money.

“And, of course, apartments. If their pre-approvals or their budget aren’t that strong but they want to get into the market and utilise the scheme, then they gravitate to apartments.”

In Victoria, the top postcode with the most guarantees allocated is 3064, which includes the Melbourne suburbs of Craigieburn, Mickleham and Kalkallo.

Local agent Dikpal Dev Pangeni of Kathmandu Properties says he’s seen a rise in people using the first-home guarantee, especially families with migrant backgrounds. 

“[Craigieburn] is quite affordable for first-time home buyers,” he says. “This suburb is full of young families because new development has been happening since 2008.”

“As a new development area, it has a great infrastructure for kids, playground, parks and everything. It looks quite fresh. I think these are some things that attract first-time home buyers.”

The median house price in Craigieburn is $628,000. It sits 27 kilometres from the Melbourne CBD.

$420,000 - $460,000

15 Hadley Lane, Craigieburn VIC 3064

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Pangeni says more than 70 per cent of the buyers in the area are first-time home buyers utilising the FHBG.

In Queensland, the top postcode is 4740, which includes the regional suburbs of Glenella, Ooralea and Mackay.

The median price of a house is $540,000 in Glenella, $535,000 in Ooralea and $415,000 in Mackay.

In the ACT, the top postcode with scheme guarantees is 2611, which includes the suburbs of Denman Prospect, Wright and Coombs.

The median unit price is $605,000 in Denman Prospect, $522,500 in Wright and $555,000 in Coombs.

“The benefit in accessing FHB discounts and incentives is that people can make the move from renting to buying sooner,” says banking and home loan expert Peter Marshall from financial comparison website Mozo. 

“The downside is that they will have to pay more interest, both due to the larger loan size and potentially a longer loan term. However, if the borrower’s priority is to get into the housing market before there’s another leap in prices, then this enables them to make a purchase.“

Powell agrees, and emphasises the importance of always checking the health of a home loan and not making it a “set and forget” payment.

“It’s important to remember that the mortgage environment is still very competitive, which is why we’ve seen such a change in mortgage rates,” she says. “There is still such a competitive nature between different lenders, and it’s really important to get that expert advice and speak to brokers to make sure you’ve got the right outcome for your financial circumstance.”