Perth first-home buyers slam new guarantee scheme, saying it’s backfired and pushed property prices higher

WA first-homebuyers say the Government’s 5 per cent deposit scheme has worsened the affordability crunch it aimed to fix. That’s the sentiment echoing through dozens of home opens this weekend, as a wave of first-time buyers try to enter the market under the new-look home guarantee scheme. The program, which was expanded this week to include all income levels and a raised price cap, lets first-homebuyers buy a property with a 5 per cent deposit — and without paying lenders’ mortgage insurance — thanks to a government guarantee. But some buyers say it’s backfired. Yarra Arnes, 25 — who has been househunting for months with her partner Jack Brooks, 26 — said the scheme wa “a curse”. “The scheme lets us borrow more but it’s pushed the properties we were already looking at to way more. We didn’t need the government scheme but for the same property we probably do now,” she said. “We get that they’re trying to increase buying power, but all it’s done is push prices higher.” The Subiaco renters have attended more than a dozen inspections and made multiple offers, only to be beaten by stronger bidders — often investors. Myat Khin, 30, who went to four home opens on Saturday, said the scheme felt like a “bandaid” solution. “I thought the 5 per cent deposit would help at first but now it just feels like it’s made things more competitive,” she said. “The house prices have already gone up, so it kind of cancels out the benefit, especially when you’re already paying more than what the house is worth.” The number of eligible buyers has soared but the number of homes hasn’t. With Perth’s median house price rising 7.1 per cent to $895,089, many entry-level properties are now selling above the scheme’s $850,000 price cap. Colin Lamb, a mortgage broker and real-estate agent who opened a property in Mt Lawley on Saturday, said the rush of buyers was dramatic. “We had nearly 70 people through one viewing — and a lot of them were first-homebuyers,” he said. “But the house is listed for $800,000 and everyone knows it’ll go well above that. “It’s daunting (for first-homebuyers).” Mr Lamb said he was “dead against the incentive” and confirmed it had not helped first-homebuyers get ahead. “We don’t need more buying power. We need more houses,” he said. “The market has just moved up by $100,000. “Three months ago this apartment was $630,000 — now we’ll get offers in the $800,000 or $900,000 range.” A recent national study by property data group Cotality found that values in almost three-quarters of Perth suburbs were at all-time highs. In July, Perth house prices jumped by 0.9 per cent, the fastest growth of any capital city. A 25-year-old man from the northern suburbs, who asked not to be named, said the scheme finally made buying a home feel “feasible”. “I can now start looking, which is great,” he said. “I feel more independent, I don’t need a guarantor.” While spring is typically a busy time in the property market, industry leaders say this season could be especially competitive. The Real Estate Institute of Western Australia president Suzanne Brown expected a “busy month ahead” following the scheme changes. “We will be looking closely at the weekend data on Monday to see if there’s an uptick in activity,” Ms Brown said.