It’s not just the photogenic young couples that feature in most bank loan ads that are taking advantage of a scheme to increase first-home ownership.
Figures show that the number of older Australians buying their first home as they head towards retirement is growing; making up more than 10 per cent of those utilising the Federal Government’s First Home Loan Deposit Scheme.
About 6000 Australians have already signed up for the initiative that allows first-home buyers to get into the market with as little as a 5 per cent deposit without having to pay the onerous and irksome lenders mortgage insurance required by most banks.
The latest figures from the National Housing Finance and Investment Corporation showed that, while most of the applicants were aged 25–29 (34 per cent), 11 per cent of the applicants (more than 500) so far were aged between 40–59.
It is believed that many of these older first-home buyers are using their growing superannuation lump-sum to enter the market as a way to secure the age pension.
This is because the first $200,000 of the value of the family home value is the only asset not assessed as part of the means test for old-age pension; in effect a $200,000 free kick.
More of these people were therefore looking to buy before reaching retirement age simply as a way to qualify for the pension.
The numbers follow another finding that Australians in regional Australia are suffering from greater financial insecurity than those form city areas. The drought, patchy job growth and depressed wage increases below inflation have all led to regional Australians having a far lower financial “buffer” than their city counterparts.
