Hundreds of homes purchased under Australia's five percent deposit scheme have been re-purposed as investment properties, drawing criticism from affordable housing advocates who argue the program is being exploited. Housing Australia confirmed that 1,485 homes acquired through the first-home buyer initiative in the past six years are now investment properties, with an additional 109 no longer being the primary residence of the mortgage holder.
The scheme, initially introduced by the former Coalition government in 2020, allows first-home buyers to obtain a government guarantee for up to 15 percent of their mortgage, thereby reducing the need for lenders mortgage insurance. Prime Minister Anthony Albanese's administration expanded the program in October by removing income caps, aiming to broaden accessibility.
Jordan van den Lamb, an affordable housing advocate and Victorian Socialists candidate, labeled the scheme a "shameful" response to the national housing crisis. He argued that the program was predicted to inflate house prices and primarily benefit those who were already likely to purchase a home, just sooner.
"Labor loves to make things more expensive in the name of 'affordability', then have a few people stand in the corner of some room with their fingers crossed hoping some of that wealth will trickle down," van den Lamb told Newswire. His party advocates for the government to seize homes vacant for over two years without a valid reason as a more effective measure for affordability.
Data from Housing Australia indicates that over 267,000 Australians and an additional 54,043 permanent residents utilized the scheme between 2020 and May 31 of this year. Loan default rates were low, with only 13 participants defaulting and a small percentage of loans entering 90-day or longer arrears.
Analysis of participants' incomes revealed that most single applicants earned between $60,000 and $169,000 annually, though seven percent earned over $200,000. Among joint applicants, 9.8 percent earned over $250,000 combined, with 92 couples reporting incomes exceeding $400,000. Notably, the highest-earning applicants under the scheme were a couple with a joint income of $674,000 per year.
Greens housing spokeswoman Barbara Pocock called for the government to restrict the scheme to low-income applicants, stating, "It shouldn't benefit the wealthy and property investors." Currently, participants are not required to refinance their loans if they convert their purchased property into a rental. They can discuss options with their lender, and Housing Australia does not monitor loans after the guarantee has expired.