First-home plan tipped to prove an instant hit

THOUSANDS of young people are expected to eagerly take up the Coalition’s firsthome buying deposit plan in a move experts say will help boost sentiment in the property market.

Housing industries welcomed the election have result saying voters’ “rejection” of Labor’s negative gearing and capital gains tax changes, combined with the Coalition’s firsthome plan, would have an immediate positive impact.

Under the scheme, firsthome buyers who have a deposit of at least 5 per cent would have access to a government loan, which would help them save up to $50,000 in mortgage insurance over 30 years.

Initially 10,000 loans would be available, but Prime Minister Scott Morrison has indicated this could be expanded.

Property Council of Australia chief executive Ken Morrison said he expected that cap to be exceeded within the first year of the scheme.

“The deposit gap scheme recognises the big problem, which is first-home buyers having to save for years and years before entering the market,” he said.

“If it takes about five years to save up, this first cohort of people who have been saving for two, three or four years will all take up the scheme at once and I think (the Coalition) will have to raise that cap.”

Master Builders chief executive Denita Wawn said the first homebuyer scheme would be a “game changer” for young people. “It will also provide some stimulus for the housing building sector and boost confidence in the housing market,” she said.