Despite their importance in our community, essential workers are often earning low to moderate wages. It’s typically taking as long as 12.3 years for a single income essential worker to save the 20% deposit required to purchase a home in Sydney, compared with 8.3 years for their single counterparts in most other industries*.
The introduction of the First Home Loan Deposit Scheme in January this year has made it a little easier for 1 in 8 first home buyers to get into the property market with as little as a 5% deposit. The National Housing Finance and Investment Corporation (NHFIC) are guaranteeing the additional 15% required to purchase the first home. This week NHFIC reported helping a total of 1,804 key workers buy their first home in the six months to June 30, with the lion’s share of these key worker approvals going to teachers (37%) and nurses (25%).
These numbers are starting to prove the first home loan deposit scheme is making a difference, however Tim Buskens, CEO HOPE Housing, says “now the challenge is, how do we build on this type of support to benefit more people?” Estimates vary, but there are about 1.75m frontline essential workers in Australia.
Large numbers of essential workers are having to make significant personal sacrifices to save the required deposit to secure a home loan. Nearly half (47%) of these workers are taking on overtime work, 23% are moving in with family and friends and 29% are delaying starting a family*.
Surely our essential workers deserve a fair go in achieving the Aussie dream of home ownership and the security this brings! We are currently working hard to help deliver a solution. Watch this space for updates on our approaching pilot.
*The Deposit Gap Dilemma Impact on Key Workers, April 2019. Report prepared by PwC Australia, commissioned by Teachers Mutual Bank and Genworth.