Take up of the federal government’s $1.2 billion First Home Saver Account (FHSA) has soared with a 72 per cent increase over a 12 month period, according to leading mortgage broker Priority Lending.
Priority Lending Corporate Spokesman Paul Smith said the latest figures from the Australian Prudential Regulation Authority (APRA) showed that as of March, 2012, 35,200 FHSA accounts had been opened nationwide containing $298.3 million.
“This is a 72 per cent improvement on March, 2011, when the FHSA accounts totalled just over $173 million,” he said.
Mr Smith said the FHSA had a sluggish start after being launched at the height of the global financial crisis in October, 2008.
“The scheme was certainly well intentioned with an original target of assisting 700,000 people in its first four years of operation,” he said.
“But it didn‘t catch on initially as it coincided with government measures to counter the GFC such as the boost to the First Home Owner’s Grant.”
Mr Smith said changes drafted by Treasury in late September, 2011, helped to increase consumer confidence in the scheme and make it less complicated.
Under the FHSA, the government contributes 17 per cent on the first $5500 of individual contributions made each year. Account holders are required to keep savings in the FHSA for four financial years before they can use the funds to buy a home.
FHSA account holders were required to pay the money into their superannuation but the changes approved by federal parliament allowed for the savings to be paid into an approved mortgage after the end of the qualifying period.
“Priority Lending certainly encourages people looking to enter the property market to consider the FHSA and our brokers can assist first home buyers looking to take advantage of the scheme,” Mr Smith said.
“This is a great incentive to assist people trying to save a home loan deposit, with generous rewards on offer from the government.”
Mr Smith said interest in the FHSA should increase further with generous first home buyer and stamp duty concessions in Victoria, South Australia, NSW and the ACT due to expire at the end of the current financial year.
Source: Priority Lending
