Australian Help for First-Home Buyers Dwarfed by Price Boom

(Bloomberg) -- An Australian government program aimed at helping first-time home buyers cuts off support at a little more than half the of an average property in Sydney where the real-estate market has been booming.

The First Home Loan Deposit Scheme will guarantee eligible buyers purchasing a property with a deposit of as little as 5%. The program’s price cap for homes in Sydney is A$700,000 ($478,000), according to details announced by the Treasury on Sunday

That contrasts with a median property of A$1.2 million for the city, where a typical house costs A$1.4 million, according to CoreLogic, a real-estate data provider. The purchase-price thresholds under the new government program for other major cities are lower than Sydney.

Australia Is Flirting With Another Debt-Fueled Property Binge

Three interest rate cuts in Australia have reduced mortgage rates to a record, sending buyers flocking back to the housing market. Property price rises are largely concentrated in Sydney and Melbourne, where home s surged 1.7% in each city last month alone.

©2019 Bloomberg L.P.