In a significant move aimed at transforming the property market landscape for first-time homebuyers, South Australia is introducing a groundbreaking 2% deposit home loan. Spearheaded by Treasurer Stephen Mullighan, this initiative is set to make the dream of home ownership far more attainable for many South Australians, particularly those looking to build their own home.
This innovative loan scheme, a key Labor election promise, is part of a broader strategy designed to dismantle the barriers to entering the property market. For eligible first home buyers, this means not only accessing a loan with a mere 2% deposit through HomeStart but also enjoying additional financial relief through a $15,000 first home owners grant and the stamp duty abolition on new homes valued up to $650,000 or vacant land up to $400,000. Collectively, these measures can save buyers up to $44,580.
One of the most compelling aspects of the HomeStart loan is its exemption from Lenders Mortgage Insurance for those without the standard 20% deposit—a requirement that can add over $10,000 to the cost of entering the housing market. This feature, combined with the low deposit requirement, represents a significant saving for new homeowners.
The 2% deposit loan is not just a financial win for buyers; it’s also a strategic move to increase housing supply, as it applies exclusively to new builds in metropolitan and selected regional areas. Applicants must purchase a house and land package from one of HomeStart’s approved builder partners, ensuring the property becomes their primary residence.
This initiative is part of a larger commitment by the state government to address housing affordability and availability. The previous State Budget outlined a $474.7 million housing package aimed at facilitating the delivery of 3,600 new homes over the next five years, alongside cost reductions for approximately 14,000 additional new homes.
Treasurer Stephen Mullighan emphasised the government’s dedication to making home ownership accessible, stating, “We are doing everything possible to help South Australians achieve the dream of home ownership. Saving a deposit can take years, making it seem impossible to get a foot in the door. This new 2 per cent minimum deposit home loan through HomeStart is another way we are helping first home buyers, saving them thousands in upfront costs while also increasing much needed supply.”
Echoing this sentiment, HomeStart CEO Andrew Mills highlighted the loan’s potential to open the market to those previously sidelined by financial barriers. “The 2 per cent deposit loan will unlock homeownership for more South Australian first home buyers aiming to build their own home,” Mills said, noting the positive impact on the building industry and employment.
Michael Hickinbotham, Managing Director of the Hickinbotham Group, praised the government’s efforts, underscoring the transformative power of home ownership. “It is pleasing to see meaningful action by the State Government to make home ownership more accessible,” he remarked, acknowledging the broader benefits of increased home ownership for the state’s social and economic well-being.
For more details on the 2% deposit loan and a list of eligible builders, prospective homebuyers are encouraged to visit HomeStart’s website.
