The best ways to get into the Property Market as a First Home Buyer

 In Industry Updates

The great Australian dream to own your own home can feel especially hard for first home buyers, now more than ever. Home ownership of individuals aged 25-34 has decreased in recent years from 60% to 48%. With rising costs, lending constraints and increasing house prices, it can be hard not to get overwhelmed. Luckily, as a first home buyer, there are several ways to help you get your foot in the property market door and achieve your dream.

We’ve compiled a few of the best tips and information we have to give you a head start in your journey to owning your first home and finding the right property for you.

 

  1. Location, Location, Location

In the major cities, housing affordability can be especially difficult for first home buyers, particularly in high density areas. Available land has decreased dramatically and will continue to do so. This can present a great chance however, for new buyers to look slightly out of the main city areas like Newcastle and Sydney, and instead look towards close-by areas that have much more affordable land.

Near Newcastle, areas like Kurri Kurri, Cessnock, Rutherford and Maitland have greater access to desirable land while still being in close reach of the expressway, schools and infrastructure. These areas are progressively becoming more popular, even making into the top ten most popular areas for first home buyers. In fact, “Regional areas like the Hunter are out-performing Sydney across the board,” Fairfax Domain Group data scientist Dr Nicola Powell said.

Along with this, a recent study comparing mortgages to rental costs has showcased areas where mortgage repayments were cheaper than the average rents and include Maitland, Kurri Kurri, Muswellbrook and Singleton with savings ranging from $300 to up to $900 a year.

As a mini case study, we had a closer look at one of the areas that have had substantial growth recently: Kurri Kurri in the Hunter Region.

Not only is Kurri Kurri only 10 minutes to the new expressway providing close access to Newcastle and Sydney, the area is also bursting with available land with fantastic access to schools and growing infrastructure and further development planned for the area.  With the Newcastle regions growth and buyers looking further out of the city, return on investment in the long run are high for this regional hot spot.

 

  1. Grants

If you’re a first home buyer, there are a bunch of government grants and concessions available to assist you. Currently, different grants are offered depending on your eligibility and it’s important to know what is best for you and your future needs.

The biggest grant opportunities come with building a new home, with $10,000 offered to subside the cost of building if you choose to do so. Along with this, you won’t have to pay stamp duty if the house is under $650,000 (and you will get a concession rate between $650,000 – $800,000).

If you are building new, you have a full 12 months to move into your brand-new home and get the benefit of having a newly designed home to live in that will last for many years to come (and potentially offer further tax incentives). The cost benefits to buying a new home vs an existing house is in the breakdown below:

You can claim a first home owner grant if:

  • You are building a newly constructed home, one that is being substantially renovated to the value of up to $600,000 OR are building a new home to the value of up to $750,000
  • You are over 18 years of age
  • You are an Australian Citizen or permanent residence
First home purchase price Ordinary stamp duty Savings for first home buyers of new dwellings* Savings for first home buyers of existing dwellings* Total stamp duty charges for foreign investors (surcharge plus stamp duty)**
$500,000 $17,990 $28,768 $18,768 $57,990
$550,000 $20,240 $31,451 $21,451 $64,240
$600,000 $22,490 $34,361 $24,361 $70,490
$650,000 $24,740 $26,857 $26,857 $76,740
$700,000 $26,990 $18,786 $18,786 $82,990
$710,000 $27,440 $17,172 $17,172 $84,240
$750,000 $29,240 $10,950 $10,950 $89,240
$775,000 $30,365 $6,922 $6,922 $92,365
$800,000 $31,490 $2,896 $2,896 $95,490

– for more info visit: www.nsw.gov.au/improving-nsw/projects-and-initiatives/first-home-buyers/#how-much-could-first-home-buyers-save

 

  1. Proposed Labour Government changes

With the Federal Election now locked in for May 18th, it’s a great time to look at what policy changes could affect you as a First Home Buyer (for more info see our recent blog “What will the Federal Election mean for Australia’s Property Market?” – hyperlink). Labor’s policies are designed to help level the playing field for first home buyers competing with investors and, with only 1 out of all home purchases being a first home buyer, anything to make housing more affordable is a win for you!

 

We get that buying your first home can be incredibly daunting. Our aim is to guide you through this massive life decision and share with you our years of expertise as well as our wealth of knowledge in the industry to help you on your way to financial freedom. If you’d like some help getting your foot in the door of the property market then give us a call on (02) 4937 3377 or send us an email: contact@macquarieknight.com

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