To my way of thinking, we now have clear skies for first time buyers with interest rates at all-time lows, while the Federal Government is doing its bit with the First Home Loan Deposit Scheme that launched 1 January, 2020, along with First Home Buyer Grants aimed mostly at those buying or building new properties, along with stamp duty breaks.
Also don’t forget the First home super saver (FHSS) scheme was introduced by the Australian Government in the Federal Budget 2017–18 to reduce pressure on housing affordability. The FHSS scheme allows first timers to save money for a home inside their super fund.
Savvy first timers jumped in early
The anticipation that the deposit scheme would have an impact on real estate values seems to have encouraged many savvy first timers to jump in early. The ABS data shows the number of loan commitments to owner-occupier first home buyers rose 6.2% in December. The December rise was the second strongest of 2019 with owner-occupier first home buyer commitments up 21.3% compared with December 2018.
Sally Tindall, Research Director at RateCity.com.au, said, “First home buyers are flocking back to a market that is quickly heating up again,” she said. “Initial numbers show the new First Home Loan Deposit Scheme has generated huge interest, adding more competition at already packed open homes.
“The last time we saw this level of first home buyer activity was back in December 2009 when the then government’s First Home Owner Boost was wrapping up.”
Peter Ly, from our Cabramatta and Hoxton Park/Green Valley offices, agreed the First Home Loan Deposit Scheme was a major factor in the uptick in first home buyer enquiries in his region. “First-timers are dominating the entry-level housing market in Western Sydney suburbs such as Hoxton Park, Cabramatta, Canley Heights and Green Valley,” Peter advised. “First-timers represent about 80% of buyers for properties in the sub-$700,000 market in our patch.”
Our Cabramatta office recently listed the quintessential first home buyer property at 4 Slim Place, Cabramatta. “This 3-bedroom house that will need some work is for sale for between $640,000- $670,000,” said Peter. “This property is attracting only first-time buyers and won’t last long.”
In conclusion, there are multiple reasons such as low interest rates and government support making the timing perfect for new home buyers to secure a first rung on the property ladder.