Negative equity fears for SA first-home buyers in deposit scheme

Almost 60 per cent of all South Australian properties eligible for purchase under the Australian government’s 5 Per Cent Deposit Scheme have experienced a value drop in the past 10 months, prompting experts to warn those who purchased under the scheme they may be repaying a mortgage that is now worth more than their home. According to SuburbData analysis, of the 19 SA3 regions across metropolitan Adelaide, 11 have experienced a median value drop in the past 10 months, with home values of eligible properties in one slashed by almost $60,000. The analysis shows in four of those regions purchasers under the scheme price caps could now be in “negative equity” if they used a 5 per cent deposit – with their home value having dropped more than 5 per cent, effectively wiping out their deposit. These are Adelaide Hills, Port Adelaide, Salisbury and Adelaide City. Port Adelaide is one area where eligible properties bought under the 5 per cent deposit scheme have lost equity over the past 10 months. Picture: Supplied The biggest value loss here was $59,842 in the Adelaide Hills, while the average value loss of the four was $45,169.75. The data warned property price drops in seven council area...