First home buyers would receive extra help to buy. Picture: iStock.
First home buyers would receive extra help to buy. Picture: iStock.

PM bets house on promise to first-home buyers

PRIME Minister Scott Morrison has put first-home buyers at the centre of his re-election pitch, pledging to cut the amount they need to save before they can bid at auctions.

And less than a week before polling day, the PM also made a last-minute pitch for votes in Melbourne's eastern suburbs, where his government is fighting to hold seats, promising to pay $4 billion for the East West Link tollway. This would allow it to be built without money from the state Labor government, which axed the project.

Launching his government's re-election campaign in Melbourne, the Prime Minister pledged that from next year, thousands of first-home ­buyers would need to save only 5 per cent of the cost of a home before they could start bidding at auctions.

Acknowledging "it's hard to save for a deposit, especially with the banks pulling back and larger deposits of 20 per cent now being standard", the PM told the Liberal Party faithful: "We want to help make the dreams of first-home buyers a reality."

But in a swift counter-attack less than three hours after Mr Morrison unveiled his First Home Loan Deposit Scheme, Labor promised to match it.

Mr Morrison said he was not interested in getting into a "spend­athon" competition with Labor, calling "reckless spending" a burden on current and future generations.

Mr Morrison told the audience at the Melbourne Convention Centre: "I say to Australians - do not allow Labor's reckless spending to start. Vote Liberal and Nationals next Saturday."

The plan would include couples earning up to $200,000.
The plan would include couples earning up to $200,000.

Under the PM's loan deposit scheme, from January 1 first-home buyers who have saved only 5 per cent of the 20 per cent of the price of a home needed for a deposit can have the difference guaranteed by the government.

The guarantee, open to individuals earning up to $125,000 and couples earning up to $200,000, will eliminate the need for them to buy lenders' mortgage insurance, saving them about $10,000.

Walking on stage carrying bunches of Mother's Day flowers for his wife, Jenny, and mother, Marion, who'd introduced him, the PM began by speaking of his early life.

He said: "My family story is not uncommon in our country: Australians quietly going about their lives with simple, decent, honest aspirations. Get an education; get a job; start a business; take responsibility for yourself, support others; work hard; deal with whatever challenges come your way."

He believed "Australia is a promise … it's the promise that allows Australians, quietly going about their lives, to ­realise their simple, honest and decent aspirations".

In his speech, he offered $53 million in new women's health measures, including a boost to peri-natal support and tackling postnatal depression.

Speaking of the $4 billion offer for the $7 billion East West Link, the PM said he was not interested in picking a fight with Premier Daniel Andrews, though he believed Labor had chosen to ignore residents of eastern Melbourne.

Mr Morrison said: "I accept that the Victorian government has not identified the East West Link as a priority for them. So just let us get on and do it. How about that?"




How will it work?

The government will provide a guarantee on home loans, meaning borrowers will need only a 5 per cent deposit instead of 20 per cent.

What does this mean for me?

A house costing $400,000 would need a deposit of about $20,000, rather than $80,000.

Will it apply to me?

It will apply to singles earning less than $125,000 a year and couples earning less than $200,000 a year who want to buy their first home.

Are there any restrictions?

It will be capped at 10,000 loans every year, but this could be expanded. Loan applicants will also have to undergo all the normal checks before being approved.