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Our Yassified Explainer For NSW’s First-Home Buyer Equity Scheme



Australia’s sweatiest premier, Dominic Perrottet, has pledged to create a new homeownership scheme in New South Wales to allow more East Coast Aussies to become first home buyers.

There’ll be a bit of jargon going on throughout this article but we’ll do our best to keep things highly yassified for all you non-commerce students reading this.

Right now, most first home buyers need to chip in between 5-20% of their own mulla when buying a property.

So where the bloody heck do you get the other 80-95% if you’ve already exchanged all your limited edition Hannah Montana CDs at Cash Converters?

Banks have typically been the institutions that have loaned first home buyers the rest of the cashola. In most cases, they’re loaning out hundreds of thousands of dollars which is approximately 3.7 Coachella tickets.

The problem is, banks are for-profit businesses and require you to pay back the cash you loaned (called the ‘principal’ amount). They also charge a fee for yeeting you such a huge dump of dolla bills known as the ‘interest’ which is incredibly ironic cos I am not ‘interest”d in paying it.

Under the proposed plan, the NSW state government would loan first home buyers a certain amount of the total cost of a house, meaning buyers would need to lend less money from a yucky, expensive bank.

In return, the NSW government would assume temporary part-ownership (called ‘equity’) of that home until the loan was repaid. Since the NSW government is not technically a for-profit business, they wouldn’t charge interest on the loan like a bank would, which means you’ll have more money for an extra 0.2 Coachella tickets.

So for example, say you’re buying a home for $1 million because you know what? You deserve it.

You contribute 100k of your own dosh.

Next, the NSW government chips in $300k (we don’t know how much they’re willing to pledge yet but that’s just a guess) and temporarily takes over 30% ownership of the property.

Finally, the bank loans you the other $600k which you’ll need to pay interest on (ie: the bank’s payment for hauling ass on such a thicc loan).

In theory, the plan works well for first home buyers because that’s $300k less money loaned from a bank (yucky) which means $300k less they’ll need to pay that uninteresting ‘interest’ we discussed earlier.

Regarding his new plan, Perrottet said that “increasingly younger generations think being able to buy their first home is unachievable, and for me, that’s unacceptable,” as per the Sydney Morning Herald.

The Victorian State Government trialled a similar plan last year called the HomesVic Shared Equity Initiative where the Vic Government offers you a loan up to 25% of the total house cost.

More importantly though, who the heck is naming these policies? I mean the “HomesVic Shared Equity Initiative”.

Are they running some sort of competition to see who can come up with the more boring name? I’ll be keen to see what NSW names theirs. Perhaps something like the ‘NSW First Home Buyer Blah Blah Blah So On And So Forth Etc Etc”.

As a last little sweetener, the NSW Government also have a bunch of grants available for first home buyers in the form of cold hard cash which you can read more about here. How does $10k free money sound?

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