The latest figures from the Real Estate Institute of Australia show that more and more first home buyers are taking the plunge and buying their own home.
First home buyers made up more than 40% of home loan approvals during the September quarter. This is the highest percentage in more than a decade.
What are first home buyers so active
in the Australian property market?
There are two main reasons:
Interest rates in Australia are at record lows.
Low interest rates make home loan repayments more affordable. According to the Reserve Bank, Australia’s interest rates are likely to stay low for at least the next three years as the economy recovers from all the COVID-19 restrictions. That makes it a good time to buy.
The introduction of various government grants and schemes
Eligible first home buyers in Australia in all States and Territories (except the ACT) can get a first home owner grant (FHOG). In the ACT, an exemption from stamp duty is available instead. In New South Wales, the FHOG is $10,000.
In addition, a range of other government grants and schemes are available to first home buyers, including:
- the First Home Loan Deposit Scheme (FHLDS)
the FHLDS is a government guarantee that helps eligible first home buyers to avoid the cost of lenders’ mortgage insurance (LMI). This guarantee potentially saves a first home buyer $10,000 or more, and also allows them to move into their homes sooner with less deposit (as little as 5%).
- the First Home Super Saver Scheme (FHSSS)
The FHSSS allows first home buyers to withdraw up to $30,000 of voluntary super contributions early for a deposit on a home. Normally you can’t access super until you’re at least 55.
- the HomeBuilder Scheme
the HomeBuilder Scheme is a temporary federal government scheme to help the Australian economy recover from the effects of the COVID-19 restrictions. Eligible applicants can access $25,000 to build a new home if they sign a contract prior to December 31 this year and $15,000 if they sign between January 1 and March 31 next year.
All of these government grants and schemes can be used in conjunction with each other if you’re eligible to receive them. For example, if you’re a first home buyer in New south Wales and you’re eligible for the FHOG and the Homebuilder Scheme before December 31, you’ll be eligible for $35,000!
Many first home buyers are taking advantage of these grants to achieve the great Australian dream of home ownership.