dan-freeman-7zb7kuyqg1e-unsplash

Shared-equity scheme announced to improve housing affordability in New South Wales

Market Insights
2 years ago
2 minutes

The New South Wales state government has revealed a $780.4 million shared-equity scheme, comparable to pre-existing Victorian, South Australian, and federal government initiatives.

The NSW scheme will see the state government contribute up to 40% of equity to new home purchases, and 30% to existing property purchases. The new shared-equity scheme is part of a broader $2.8 billion housing package to feature in the state budget, which is due to be handed down this Tuesday, June 22.

Frontline workers, single parents of a child or children under the age of 18, and older single people aged 50 years and over will be eligible for the NSW shared-equity scheme. The scheme’s purpose is to assist these groups in overcoming affordability and accessibility issues that might otherwise hamper their participation in the property market.

The frontline workers category includes teachers, nurses, and police officers. Individual applicants’ annual income can be a maximum of $90,000. Couples applying for the scheme can have a combined annual income of $120,000 to be eligible.

Participants will need to contribute a minimum 2% deposit. Prospective homes in NSW metropolitan areas can be valued at up to $950,000 to be eligible, and homes in NSW regional areas can be valued at up to $600,000. Treasurer Matt Kean noted about 60% of properties in the state’s housing market fall within this price bracket.

NSW Premier Dominic Perrottet said the scheme is part of a soon-to-be-announced “suite” of housing affordability policies, including a push to increase housing supply across the state. The shared-equity scheme is poised for a two-year trial run, functioning “hand-in-glove” with the federal government’s comparable shared-equity initiative, the Help to Buy program, which is open to 10,000 eligible applicants.

Iterations of shared-equity schemes have already been rolled out at the state level in South Australia and Victoria. The Victorian Homebuyer Fund differs to the new NSW scheme, contributing only 25% of the total property purchase price, and requiring a minimum 5% deposit contribution.

3,000 places will be offered on the NSW shared-equity scheme per year. Further places will be added if the scheme is deemed successful.

For more news, market insights, and lifestyle, click here.

Header image source.