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Understanding Recent Housing Market Changes: Help to Buy & APRA’s Buffer

By Justin Fleming

Navigating the real estate market can be challenging, particularly with new government initiatives and policy updates. Recent developments, including the Federal Government’s Help to Buy Scheme and APRA’s mortgage serviceability buffer, are shaping the landscape for homebuyers, sellers, and investors. Below, we break down these updates and their potential impact.


The Federal Government’s Help to Buy Scheme

The newly announced Help to Buy Scheme aims to make homeownership more attainable for Australians. Starting in 2025, the Federal Government will provide an equity contribution of:

  • Up to 40% of the purchase price for a new home.
  • Up to 30% of the purchase price for an existing property.

This initiative is designed to reduce the upfront costs and mortgage size for eligible buyers.

Key details of the scheme:

  • Eligibility: The scheme is income-tested to ensure it supports those who need it most.
  • Deposit requirements: Buyers must have a minimum deposit of 2%.
  • Equity share: The government will hold a share in the property, participating in any future capital gains or losses when it is sold.

This initiative has the potential to open doors for first-home buyers and those who have struggled to save for a deposit. At Flemings, we view this as a significant step towards helping more people in our community achieve their dream of homeownership.

Learn more about the Help to Buy Scheme.


APRA Maintains 3% Mortgage Serviceability Buffer

The mortgage serviceability buffer is a critical tool used by banks to assess whether borrowers can afford home loan repayments, even if interest rates rise. Managed by the Australian Prudential Regulation Authority (APRA), this buffer is designed to protect the financial system from undue risk.

Current status:

  • The buffer remains at 3%, increased from 2.5% in 2021 due to anticipated rate hikes.
  • Despite interest rates stabilising, APRA has decided to keep the buffer at this level to ensure ongoing financial stability and mitigate future risks.

Why this matters:

  • A higher buffer can make it harder for some borrowers to qualify for a loan, but it also helps protect them from overcommitting financially.
  • APRA’s decision reflects its cautious approach to preserving the resilience of the lending system.

For more information about APRA’s serviceability buffer and its implications, click here.