The RBA just released a FOI relating to the Federal Government’s proposed First Home Loan Deposit Scheme. How many loans might be made?
“the point of the estimates is that the various caps on the scheme (10,000 loan cap, income and house prices) are likely to be the binding constraint on the amount of loans provided rather than the scheme’s equity funding”.
To provide some context:
Based on ABS numbers, in the year to February there were 110,000 loans to first home buyers. The average loan size in February to FHB was $337,412. Usual caveats apply to these data.
Using the average loan size to FHB and assuming the scheme covers 15 per cent, the government will guarantee around $50,000 per loan. If the scheme has $500 million in funding, this implies
– 9,879 loans if the scheme holds reserves covering 100 per cent of its commitments.
– 49,395 loans with 20 per cent reserves.
– 98,790 loans with 10 per cent reserves.
– 197,583 loans with 5 per cent reserves.Average loan size data are biased downwards, so can use average house prices instead as arguably an upper bound. In the December quarter ABS average house prices were $650,000. 15 per cent of this is $97,500.
– 5,128 loans if the scheme holds reserves covering 100 per cent of its commitments.
– 25,641 loans with 20 per cent reserves.
– 51,282 loans with 10 per cent reserves.
– 102,564 loans with 5 per cent reserves.
