Despite record low interest rates, first home buyers now account for less than 10 percent of all new home loan dollars financed – a record low.
Yet an opportunity to support a savings initiative for first home buyers is going to waste, according to Australia’s leading financial comparison website, RateCity (www.ratecity.com.au).
The initiative, a Government program aimed at supporting saving by would-be buyers, is not working well, and needs urgent attention – the First Home Saver Account scheme.
When the scheme was launched in 2008, it was predicted to help hundreds of thousands of Australians. But latest Australian Prudential Regulation Authority figures show a total of $491 million is held in just over 45,000 First Home Saver Accounts (FHSA) as at June this year.
Alex Parsons, CEO of RateCity.com.au, said there are a number of things Government could do to improve the scheme – most notably around reducing the paperwork burden. With some minor adjustments, there’s an opportunity for more institutions to come to the party.
“Right now, only nine institutions offer these accounts – and despite some offering them in the past, none of the big four banks currently do, so it’s little surprise that many potential buyers haven’t heard of them, and don’t use them,” he said.