On Monday,the Coalition said the price caps on itshome guarantee scheme would be increased while the number of guarantees – which go to people with deposits as low as 5 per cent – would also be increased.
In NSW,people buying properties worth up to $900,000 in Sydney and major centres,including Newcastle,and homes worth up to $750,000 in regional areas would qualify for the scheme. In Victoria,the major city cap would increase next financial year to $800,000,while for regional areas it would go to $650,000.
Despite the policy,first-home buyer purchases over the past 12 months fell by 29 per cent.
Barrenjoey chief economist Jo Masters said the policy simply brought forward purchases,putting more pressure on prices.
“There’s no simple solution to dealing with the prices in the property market. Just stoking demand is not one of them,” she said.
Grattan Institute economic director Brendan Coates said there would be only a marginal impact on prices from the lift in caps,but noted that the expansion of the scheme would add to demand.
Coates said the higher caps simply reflected higher prices,with first-time buyers “remaining stationary” compared with where they were last year.