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It’s a First Home Buyer Bonanza - October 2020

By Rich Harvey, CEO & Founder, propertybuyer.com.au

There’s no denying coronavirus has impacted many facets of everyday life, but if there’s a silver lining it’s that it has made it a good time to be a first home buyer.

Earlier this month, it was confirmed that the Federal Government will extend its First Home Loan Deposit scheme to help first timers get into the property market. Basically, it removes the need to save a mammoth 20 per cent deposit for a home loan, instead reducing it to as little as five per cent, with the government guaranteeing the rest.

This is in addition to the previously announced HomeBuilder program, which was introduced in response to the economic impacts of coronavirus.

And every single state and territory, with the exception of the ACT, has their own incentives to help make home ownership a little cheaper.

But the grants and assistance available aren’t the only reason why it’s a good time to make your move as a first home buyer. I’ll explain why.

But first, here’s everything on offer for first-time buyers across Australia.

NATIONAL

WHAT’S ON OFFER

WHAT IT’S WORTH

CONDITIONS

First Home Loan Deposit Scheme

Guarantee of 15 per cent of deposit required

- First-timer buyers of new or established dwellings

- Income of no more than $125,000 for singles and $200,000 for couples

- At least 5 per cent deposit

- Loan must be with one of 27 participating lenders

- Price must be less than region-specific cap

HomeBuilder

$25,000

- Owner-occupiers building a new home or substantially renovating an existing one

- Enter into a contract by December 31

- Income of no more than $125,000 for singles and $200,000 for couples

- Price must be less than $750,000 for new build

- Renovation cost must be at least $150,000 and no more than $750,000

 

Find out more about the First Home Loan Deposit Scheme.

Find out more about the HomeBuilder program.

 

NEW SOUTH WALES

WHAT’S ON OFFER

WHAT IT’S WORTH

CONDITIONS

First Home Owner Grant

$10,000

- First-timers building a new home

- Price must be less than $750,000

- Must make it principle place of residence

First Home Owner Grant

$10,000

- First-timers buying a new home (or substantially renovated)

- Price must be less than $600,000

- Must make it principle place of residence

Stamp duty exemption

Total cost of duty

- First-timer buyers of new or established dwellings

- Price must be less than $650,000

- Must make it principle place of residence

Stamp duty concession

Discount on duty payable

- First-timer buyers of new or established dwellings

- Price must be between $651,000 and $800,000

- Must make it principle place of residence

 

Find out more about the assistance offered in New South Wales.

 

VICTORIA

WHAT’S ON OFFER

WHAT IT’S WORTH

CONDITIONS

First Home Owner Grant

$20,000

- First-timers buying or building a new home in regional Victoria

- Property must be less than five years old

- Price must be less than $750,000

- Must make it principle place of residence

First Home Owner Grant

$10,000

- First-timers buying or building a new home in cities

- Must be less than five years old

- Price must be less than $750,000

- Must make it principle place of residence

Stamp duty exemption

Total cost of duty

- First-timers of new or established dwellings

- Price must be less than $600,000

- Must make it principle place of residence

Stamp duty concession

Discount on duty payable

- First-timers of new or established dwellings

- Price must be between $601,000 and $750,000

- Must make it principle place of residence

 

Find out more about the assistance offered in Victoria.

 

QUEENSLAND

WHAT’S ON OFFER

WHAT IT’S WORTH

CONDITIONS

First Home Owners’ Grant

$15,000

- First-timers buying or building a new home

- Price must be less than $750,000

- Must make it principle place of residence

 

Find out more about the assistance offered in Queensland.

 

SOUTH AUSTRALIA

WHAT’S ON OFFER

WHAT IT’S WORTH

CONDITIONS

First Home Owner Grant

$15,000

- First-timers buying or building a new home

- Price must be less than $575,000

- Must make it principle place of residence

 

Find out more about the assistance offered in South Australia.

 

WESTERN AUSTRALIA

WHAT’S ON OFFER

WHAT IT’S WORTH

CONDITIONS

First Home Owner Grant

$10,000

- First-timers buying or building a new home

- Price must be less than $750,000 south of the 26th parallel (includes metro Perth) or $1 million north of the 26th parallel

- Must make it principle place of residence

 

Find out more about the assistance offered in Western Australia.

 

TASMANIA

WHAT’S ON OFFER

WHAT IT’S WORTH

CONDITIONS

First Home Owner Grant

$20,000

- First-timers buying or building a new home

- No cap on price

- Must make it principle place of residence

Stamp duty concession

50 per cent of duty cost

- First-timers buying an established dwelling

- Price must be less than $400,000

- Must make it principle place of residence

 

Find out more about the assistance offered in Tasmania.

 

NORTHERN TERRITORY

WHAT’S ON OFFER

WHAT IT’S WORTH

CONDITIONS

First Home Owner Grant

$10,000

- First-timers buying or building a new or buying an established home

- No cap on price

- Must make it principle place of residence

Home Owner Discount

Up to $18,601 off duty cost

- First-timers buying or building a new home or buying an established home

- No cap on price

- Must make it principle place of residence

 

As you can see, for many first-time buyers there are some generous grants or discounts available to help make that first step on the property ladder a little easier.

 

But it’s not the only reason why now is a good time to buy.

In many major markets, COVID-19 has caused something of a property pause. Prices have stabilised after several months of strong growth, due to a slump in new listings and an easing in buyer activity.

For first timers, who are usually locked out by skyrocketing values or stiff competition, it’s worth taking the opportunity to make a move with less pressure.

And in Melbourne, where values have slumped in some suburbs due to the strict lockdown sparked by a second wave of infections, there are some incredible bargains going.

In Victoria, those discounts won’t last too long. Once restrictions have eased and life begins returning to normal – and people go back to work – the market will settle itself once more.

Waiting for prices to drop further could be a fool’s game elsewhere too.

This is especially true in a place like Sydney, where the median price has slid only very modestly since the start of coronavirus. This defies predictions from commentators and number crunchers back in February and March, who forecast a price crash.

It never eventuated. Why? Because demand remains solid, despite the nerves and uncertainty. That’s the long-term resilience of Sydney property, which is sought-after and held in high regard by would-be buyers even in the midst of a global crisis of unprecedented proportions.

The long-term outlook for Sydney is exceptional. It remains a world city that ordinarily attracts hordes of new residents from around Australia and across the globe. They all need somewhere to live and there’s simply not enough dwellings to accommodate them.

Even right now, with immigration on hold and interstate movement hard, there’s a shortfall of new homes being built. Even a boom in construction couldn’t satisfy it.

 

It’s a great time to buy, but you need to be careful.

Buying the wrong property is a significant risk that could result in much more than having a living room that’s too small or a bedroom that gets no natural light.

A misstep on your first real estate purchase could cost you dearly as it’s the foundation of your real estate ownership future. You run the risk of paying too much, buying something that will never appreciate in value, being stuck with something that could even go backwards in price, and wasting years in lost real estate opportunities.

It’s easy to be dazzled by fast-talking property marketeers who promise you the world and sell you a dud. It’s also very easy to become overly emotionally invested and pay too much or overlook red flags.

In many cases, being lured in by just any brand-new dwelling is a mistake. They look fancy and they have all of the modern conveniences that we all like, but they can be overvalued and of low quality. Buying new because of good package deals or hefty discounting could cost you big time. Occasionally those new builds work out well for first timers, but most of the time they don’t.

It’s why you shouldn’t go it alone when embarking on your very first property purchase. Enlist the services of an independent, experienced and qualified buyers' agent who can work within your budget to achieve your goals, both now and in the future, and source a range of potential homes that fit the bill.

They can tap their networks and hit the pavement to source opportunities that you won’t find on your own, including off-market deals. And then they negotiate on your behalf directly with the seller’s agent, handling the entire process so you don’t have to stress about it.

 

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