First home buyers can feel discouraged by media articles and news of properties selling well above reach.
We can arguably say that following the 2017/18 Federal Budget there was speculation that first home buyers had no hope, particularly in the Sydney property market.
According to the latest data from Australian Bureau of Statistics (ABS), stamp duty incentives in New South Wales and Victoria have supported jumps of 55 per cent and 35 per cent respectively in the value of first home buyer commitments in just two months.
ANZ senior economist Daniel Gradwell says, “The value of first home buyer commitment in August 2017 was 40 per cent higher than a year ago.”
This data highlights that stamp duty is one of the key barriers for first home buyers wanting to participate in the property market.
In NSW, stamp duty is abolished on all homes (new and existing) up to $650,000 – savings of up to $30,000 which can be put towards a deposit.
For properties valued between $650,000 and $800,000, the stamp duty concession will be gradually reduced.
The surge in first home buyer activity has not resulted in a boost in house prices (appearing relatively steady) and due to lower interest rates, paying off your home sooner could potentially be easier than in previous years.
In other states, the Queensland first home buyers are amongst the winners, with the government extending the First Home Owner Grant Boost of $20,000 for purchases of new homes with a value of up to $750,000 until 30th June 2018, contracts entered between 1 July 2016 to 30 June 2018 may be eligible for $20,000 grant.
The latest data from the Australian Bureau of Statistic shows Queensland’s first home buyer activity has increased by 16 per cent during 2017, and intensified in the last month of the $20,000 First Home Owners’ Grant.
Queensland has also remained the top performing state for home buying activity, keeping the ‘great Australian dream’ of homeownership alive.
Melbourne’s stamp duty cuts have brought more first home buyers into the Victorian property market. The number of first home buyers using stamp duty concessions doubled after the state government introduced the changes on 1St July 2017.
More than 2,100 Victorians have used the first home buyer incentives since July 1, including 1,850 who paid no stamp duty when buying their first property, according to state government figures released late September 2017.
The changes mean that people buying their first home do not pay any stamp duty on properties under $600,000 and receive stamp duty relief (concession) for properties from $600,000 and $750,000. Further offering first home owner grants of $20,000 for newly-built houses in regional Victoria.
“We’ve implemented these reforms to make it easier for first home buyers to crack into the housing market, and already we’re seeing a very strong uptake, resulting in significant savings for first home buyers,” Treasurer Tim Pallas said.
Further to the positive response across the states on stamp duty incentives and grants, lenders are focused on providing competitively low rates, low on-going fees, and one lender has even offered $1,000 conveyancing rebate specials for first home buyers – even those with low deposits can benefit.
Prescott Securities can assist with your journey in buying your first home, and securing you the best possible loan. For more information, contact your adviser today.