A financial scheme spruiked as getting single parent families into housing has been dubbed "out of step" and "unrealistic" by critics due soaring property prices felt nationwide.
Speculation has arisen over the effectiveness of the Family Home Guarantee scheme, with concerns brewing a potential price fall in the housing market in combination with a slated rise in interest rates could leave single-income families worse off.
The FHG was announced in the 2021 May budget and allows a single parent family to obtain a mortgage with a 2 per cent deposit, with the scheme primarily advertised to low-income mothers.
Analysis conducted by RateCity for The Canberra Times shows the price caps associated with the scheme administered by the National Housing Finance and Investment Corporation (NHFIC) are so low that a family is priced out of the median price of a home in any capital city.
A family is also priced out of the median unit price in Canberra, Sydney and Hobart, while further analysis shows the average income of a single parent would only obtain a borrowing capacity limit half of the current caps.
Federal Labor has confirmed it will scrutinise the scheme at the upcoming senate estimate when NHIFIC appears on Wednesday, with a focus on how many families have been settled into a home.
Labor housing spokesman Jason Clare slammed the scheme, saying there is currently a housing crisis and the measure does next to nothing to fix affordability issues.
"It is harder to buy a house now than ever before and a lot more is needed than this to help single parents buy a home," Mr Clare said.
"There are about a million single-parent families in Australia. This is a small scheme. The government says it will help 2500 a year."
The FHG is demand-driven however the Commonwealth has previously stated the scheme has around 10,000 spots through to 2025.
Assistant Treasurer Michael Sukkar confirmed 2200 spots had already been allocated.
"The Home Guarantee Schemes have assisted more than 60,000 Australians on their journey to homeownership," Mr Sukkar said.
"This includes more than 2200 single-parent families through the Family Home Guarantee, and more than 14,000 affordable properties have been provided through low-cost financing."
It is understood the total does not reflect the number of people which have reached settlement and living in a dwelling.
Based on Commonwealth Bank lending rates, the average full-time female with two children would have only have a maximum borrowing capacity of $479,700.
A single mother on the average part-time wage of $55,000 would have a borrowing limit of $279,600, meaning they would be priced out of any median unit in any major city.
The maximum cap for the ACT is $500,000. Based on CoreLogic figures, the average unit price in Canberra is $594,992 while the median house price is $1.03 million.
Mr Sukkar's office confirmed the scheme was not designed to target the median house price and was designed to target low-income earners.
RateCity research director Sally Tindall said the caps were "unrealistic" and questioned the architecture of the scheme, flagging the loan serviceability was constrained and a potential downturn in the housing market could leave a family paying more than what the place was worth.
"This troubled scheme is facing new challenges with expected interest rate rises as early as this year and a subsequent drop in property prices in 2023," Ms Tindall said.
"These emerging issues add to the existing problems of restrictive property caps and that many single parents are unlikely to earn enough to service a 2 per cent deposit loan."
Kate Colvin from Everybody's Home said; "it's a drop in the ocean in terms of targeting the issues women face in housing markets around affordability."
National Council for Single Mothers and their Children chief executive Terese Edwards said the scheme was "out of step" and did not address housing security for low-income females with dependents.
Both advocacy groups said they had not heard of a single parent accessing the scheme and settling into a home.
"I still haven't received feedback from a woman who has been successful," Ms Edwards said.
