The announcement of the Victorian government's Victorian Homebuyers' Fund, announced Friday 8 October, has received an underwhelming response from the region's estate agents.
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Horsham estate agent, Wes Davidson, said the scheme simply wasn't completely thought through.
Under the $500 million scheme, eligible homebuyers would have the option of receiving a contribution of up to 25% towards the purchase price of their property, reducing their minimum required deposit to 5% and avoiding the need to pay Lenders Mortgage Insurance.
The Victorian Homebuyer Fund is a shared equity scheme, meaning that the Victorian government's financial contribution would be made in exchange for a share, or proportional interest in the property.
However, Mr Davidson questioned the decision to utilise an equity scheme, rather than grants.
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"I'm not sure whether the Victorian government needs to have a share in people's homes; it just doesn't smell right to me."
Mr Davidson said the move was a "political stunt" and questioned the timing of the government's announcement.
"It's come at an interesting time. On one hand you've got the RBA suggesting to banks that they wind their lending back at the moment to try and put the brakes on the market a little bit."
The Reserve Bank also suggested that measures should be taken to ensure lending standards are maintained.
"On the other hand, you get the Victorian government coming out and saying we're going to give you some money to first home buyers to get into the market," Mr Davidson said.
Mr Davidson said the money in the scheme could better be used to assist those Victorians worst affected by the COVID-19 pandemic.
"I'm sure some of that money could possibly be better invested, trying to help people not lose their businesses and not lose their houses," he said.
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"In a time of high rising prices, giving a prop up for people that are struggling at the market, I'm not sure that's the smartest thing in the world to do."
According to a spokesman for the Victorian government, the Homebuyer Fund's shared equity arrangement will reduce the amount of money eligible participants need to enter the property market, and relieves Victorian homebuyers from Lenders' Mortgage Insurance.
Participants are still eligible for other Victorian Government housing schemes, including the First Home Owner Grant and first home buyer stamp duty concessions or exemptions, if applicable.
"The fund will be a sustainable scheme where homeowners can buy out the Government's share at market value over time if they choose, and those funds will then be reinvested to help other aspiring homebuyers get into the property market," the spokesperson said.
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