Australia to Expand First-Home Buyer Assistance to Lift Economy

Meghann Showers

(Bloomberg) — Australia will provide 10,000 extra places in a program to help first-home buyers and encourage construction as the economy recovers from the impact of the Covid-19 pandemic. © Bloomberg An advertisment for residential property is displayed on the fence of a show home at a new housing development […]

(Bloomberg) — Australia will provide 10,000 extra places in a program to help first-home buyers and encourage construction as the economy recovers from the impact of the Covid-19 pandemic.



a sign on the side of a building: An advertisment for residential property is displayed on the fence of a show home at a new housing development in Melbourne, Australia, on Tuesday, Sept. 1, 2020. Australian house prices fell for a fourth consecutive month in August as a slump in the Melbourne market -- the center of a renewed Covid-19 outbreak -- weighed heavily on the national picture and expected higher unemployment continues to cloud the outlook.


© Bloomberg
An advertisment for residential property is displayed on the fence of a show home at a new housing development in Melbourne, Australia, on Tuesday, Sept. 1, 2020. Australian house prices fell for a fourth consecutive month in August as a slump in the Melbourne market — the center of a renewed Covid-19 outbreak — weighed heavily on the national picture and expected higher unemployment continues to cloud the outlook.

The First Home Loan Deposit Scheme will be expanded from Oct. 6 to support the purchase of a new or newly built home, Treasurer Josh Frydenberg said in a statement. About 20,000 people have already used the program, which allows them to purchase their first property with a deposit of as little as 5%, he said.

“The government recognizes that saving a deposit has become a more significant barrier to entering the housing market than the ability to service a home loan,” Frydenberg said. “The additional guarantees will be available until June 30, 2021, and will drive more construction and support jobs as part of our economic recovery plan.”

Video: Mortgage demand falls despite interest rates setting another record low (CNBC)

Mortgage demand falls despite interest rates setting another record low

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Frydenberg is set to ditch fiscal restraints and unveil a massive surge in government spending to restart the economy when he presents his budget on Tuesday, Oct. 6. The plan is set to see the budget deficit widen to A$220 billion ($158 billion), or 11.6% of gross domestic product, this fiscal year, according to the median estimate from a Bloomberg survey of economists. That’s A$35.5 billion higher than the Treasury’s July forecast.

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