NHFIC releases 2022-23 HGS data and trends

The report includes data insights during a challenging period for first home buyers with the rapid increase in interest rates impacting on housing affordability. 

Key insights from the report include:

• The Scheme's share of the First Home Buyer market has grown significantly. Across Australia, close to 1 in 3 first home buyers in 2022-23 were supported by the Scheme, a significant increase from the 1 in 7 during 2021-22.
• The number of guarantees issued in 2022-23 increased materially, supporting around 41,700 Australians into home ownership (up from 32,500 in 2021-22) following the Government's expansion in the number of places available in the Scheme.
• The new RFHBG, launched in October 2022 , helped more buyers in regional areas into home ownership. Around 10,860 or more than one third of all HGS guarantees were issued to buyers in regional areas in 2022-23 up from around 7,390 in 2021-22.
• An increasing proportion of younger buyers have participated in the Scheme each year since inception. More than half of all places under the FHBG and RFHBG in 2022-23 were taken up by people under the age of 30, up from around a third in 2019-20, the first year the Scheme was in operation. Interest from first home buyers aged 18-24 has risen substantially to around 14% of all purchases in the FHBG in 2022-23, up from 3% in 2019-20.
• The Scheme is helping a growing number of key workers purchase a home. Around 7,721 guarantees were issued to key workers in 2022-23, up 37% from 5,650 in 2021-22. In 2022-23, more than 1 in 4 of all guarantees under the FHBG were issued to key workers such as teachers, nurses and social workers. 
• More than 9,700 households (just over 12% of total guarantees issued to date) have already transitioned out of the Scheme, with most of these buyers having accumulated enough equity to achieve a Loan to Value ration (LVR) of less than 80% and therefore no longer requiring a guarantee. This demonstrates the temporary nature of support offered through the HGS with the Scheme acting as a gateway to home ownership.
• Arrears under the Scheme remain low (less than 0.1%) and below broader market benchmarks for high LVR lending. Given the macroeconomic environment, in the coming year, arrears may rise in line with trends in the broader homeloan market. 

Head of Resarch, Data and Analytics Hugh Hartigan said, 'The broader macroeconomic environment with rapidly rising interest rates has substantially decreased mortgage serviceability with flow on effects for affordability and this has led to first home buyers relying more heavily (proportionally) on the Scheme than in previous years.'

Chief Program Officer Home Ownership Jennifer Chew said, 'The report demonstrates how each year the Scheme is helping more Australians, including key workers and those living in regional areas, buy their own home sooner, and it's great to see the increasing number of participants who have built up enough equity to transition out of the Scheme.'

The FHBG, FHG and RFHBG are Australian Government initiatives to support eligible home buyers purchase a home sooner. On 1 July 2022, these initiatives were brought under the new banner of the Home Guarantee Scheme (HGS). During 2022-23, 50,000 places were available to eligible home buyers across the FHBG, FHG and RFHBG.

From 1 July 2023, the Scheme expanded to include eligible Australian permanent residents as well as Australian citizens, non-first home buyers who have not owned a property in the last 10 years and any two applicants broadly, such as friends, siblings and other family members, as well as married or de facto couples. In addition, the FHG expanded to include eligible single legal guardians with at least one dependent child as well as eligible single parents.

For more information, view the full report here.