18 June 2019

Stars are aligning for first-home buyers as rates, incentives aid entry into market

| Rachel Ziv
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The gap between mortgage repayments and rent is much closer in the ACT where the abolition of stamp duty for first-home buyers will make it easier to buy come July 1. File photo.

It’s been a bit of a whirlwind for home owners these past few months with a suite of changes on the cards at both a local and federal government level.

But first-home buyers have undeniably come out on top, with a range of attractive offers and promises across the board at a time when the ACT’s rental affordability crisis doesn’t appear to have an end in sight.

The June Housing Affordability Report from Adelaide Bank and the Real Estate Institute of Australia shows the amount of family income needed to make average rental payments in the ACT has increased yet again in the past quarter. It’s now at 19 per cent, which is up 0.5 per cent against the same time last year.

Housing affordability increased slightly, with income required to meet loan repayments decreasing to 20.3 per cent. This means that there is only a 1.3 per cent difference in monthly rent versus monthly mortgage payments, compared to our NSW neighbours with average rental payments 7.2 per cent less than average mortgage payments.

With the RBA announcing its first rate cut in almost three years, it’s become considerably attractive to ditch the lease – and it appears first-home buyers may agree.

Last quarter the number of loans to first-home buyers in the ACT decreased by a whopping 44.8 per cent, after consistently coming out on top against other states and territories. This could indicate buyers are choosing to wait to take advantage of the ACT Government’s no-stamp-duty scheme which officially starts next month.

Under the new scheme, first-home buyers with a household income of less than $160,000 (more if you have dependents) pay no stamp duty from July 1. They can buy any home – old or new – and there is no cap on property value.

This coincides with Prime Minister Scott Morrison’s election promise to guarantee the shortfall from a 5 per cent to 20 per cent deposit for first-home buyers, negating the need to purchase mortgage insurance.

Speaking back in May, he said: “That would include guaranteeing…the additional loan amount taken out by the first-home buyer to cover the difference between the lower deposit, say 5 per cent, and 20 per cent of the value of the property.

“This scheme would give preference to working with the smaller banks and the non-bank lenders to boost competition.

“Of course, the lenders would still be the ones lending the money. They will still do all the normal checks on the borrowers to make sure they can meet their repayments. This isn’t free money.

“This scheme will be available to first-home buyers with an income of up to $125,000 or a couple with $200,000, where they are both first-home buyers.”

There is no word yet on when this potential scheme will be available, but it’s another win for those who have been waiting for yet another reason to get out of the rental market and into their own home.

In terms of saving for the deposit, the First Home Super Saver Scheme is also still running after being announced in the 2017-2018 Federal Budget. And for aspiring buyers who have been making the extra contributions into their super for the past two years, this year’s end of financial should see them close to having saved up a $30,000 deposit.

To find out about securing a low interest first home buyer loan with a local community bank, pop into one of these Bendigo Community Bank® branches:

Curtin: 1/20 Curtin Place, Curtin. Ph: 6260 5140

Jerrabomberra: 2a/2 Limestone Dr, Jerrabomberra. Ph: 6299 8357

Wanniassa: Wanniassa Shopping Centre, Sangster Place. Ph: 6231 9024

Calwell: Calwell Shopping Centre, Webber Crescent. Ph: 6291 3385

This is a sponsored article, though all opinions are the author’s own. For more information on paid content, see our sponsored content policy.

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