The First Home Loan Deposit Scheme was used by one in eight first home buyers between March and June this year, according to a review of the scheme.
The National Housing Finance and Investment Corporation has analysed the first six months of the FHLDS, reporting that buyers who accessed the scheme were able to bring forward their first home purchase by an estimated four years.
Around two-thirds of first home buyers using the scheme borrowed between 94 and 95 per cent of the purchase price.
Under the scheme, eligible first home buyers can purchase a home with a deposit of as little as 5 per cent. The NHFIC guarantees a scheme lender up to 15 per cent of the value of the property.
Eligibility criteria include: single applicants must have annual income under A$125,000 and couples under $200,000; and the price of property must be under a price cap, which varies across Australia.
Initially, 10,000 places were released to participating lenders on January 1 this year, with an additional 10,000 places released on July 1 for the 2020/21 financial year.
At June 30, 10,000 scheme places had been allocated. Of those, 6814 participants had either signed a contract or settled on their home, while the rest were in the pre-approval stage and still looking for a property.
The group that made greatest use of the scheme were people aged 25 to 34 with incomes ranging between $60,000 and $80,000 for singles, and $90,000 to $125,000 of combined income for couples.
The median purchase price for singles was $370,000 and for couples $425,000. Buyers using the scheme borrowed less than those in the broader home buyer market.
NHFIC estimated that if buyers under the scheme had to save the entire 20 per cent deposit, they would have had to delay the purchase by an average of four years and by five years in New South Wales.
Key workers (teachers, nurses, firefighters, police, childcare workers and defence force personal) made up one in six participants.
The geographic spread of home buyers accessing the scheme was broadly in line with general population distribution, with 62.3 per cent of purchases in the capital cities and 37.7 per cent in the regions. Demand in Western Australia and South Australia was below the population distribution.
Queensland had the highest proportion of first home buyer participants, with close to 20 per cent using the scheme, followed by NSW and Tasmania.
There was particularly strong demand in Toowoomba in Queensland, south western Sydney and Craigieburn and Frankston in outer Melbourne.
The bulk of purchases (70 per cent) using the scheme were houses. Ten per cent were newly constructed dwellings.
A significant proportion of scheme applicants received other government support; about 40 per cent also received state and territory stamp duty concessions, first home owner grants and used the First Home Super Saver Scheme.