Affordability and availability have become the two biggest factors in property at the moment, especially if you are someone either renting, or trying to get onto the property ladder for the first time (or the first time in a while).
Prices have risen significantly since COVID first hit, and for those living here in the Far North, those rises have really been the first substantial change to our market in the best party of a decade (and a heck of a surprise if you haven’t been watching property prices for a while!).
Beyond the higher prices you’ll pay today to purchase, rents have also increased, occasionally even outpacing sale prices. If you are putting together a deposit and squeezed between needing a higher amount, and trying to save while paying more each week in rent, well it’s not a comfortable spot!
Cue the Federal Government’s latest expanded initiative – The First Home Loan Deposit Scheme changing name to the First Home Guarantee Scheme and an expansion to 35,000 places nationally. Unlike the First Home Buyer’s Grant ($15,000 cash) which only applies to new builds, this scheme works for existing homes as well and is about keeping money in your pocket (rather than putting it in your pocket) by allowing you to buy a home with a 5% deposit and no Lender’s Mortgage Insurance. To put it in perspective, that’s $15,000 saved on a $450,000 purchase.
And its no longer just first home buyers, at least if you’re classed as a regional area (and yes, Cairns qualifies), with buyers that haven’t owned a home in the past 5 years now also eligible for a similar grant.
Now you’ll note this doesn’t make your purchase cheaper, per se, but it does let you get into the market a heck of a lot sooner, without paying the penalty you normally would. There are caps in place on the price of home you can buy under the scheme but for those targeting units, this is a huge step up and a chance to get into a $300,000 unit with a deposit of $15,000 (plus costs).
This should have a flow on effect where units (that haven’t performed to the same degree as houses) start to see more activity from buyers now able to make a move. On the downside, availability isn’t likely to improve off the back of this particular initiative, so it remains a case of acting fast to avoid missing out.
Tom Quaid is the REIQ Zone Chair for Cairns