Why it's a good time for first-home buyers (even if you're not ready to live in it)

According to realestate.com.au data, first-home buyer enquiries are up. It’s believed to be driven by a two-prong change this year: record-low interest rates and the 5% deposit scheme. Most recently, the HomeBuilder scheme gives eligible applicants a $25,000 grant to build a new home or renovate an existing property.

Date:

11-Nov-2020

Category:

Buying

Tags:

Author:

Amanda Smith

Why it's a good time for first-home buyers (even if you're not ready to live in it)

According to realestate.com.au data, first-home buyer enquiries are up. It’s believed to be driven by a two-prong change this year: record-low interest rates and the 5% deposit scheme. Most recently, the HomeBuilder scheme gives eligible applicants a $25,000 grant to build a new home or renovate an existing property.

In New South Wales, stamp duty has also been removed for first-home buyers – making entry into home ownership smoother than ever. In short, if you’re thinking about buying a house in the Adelaide Hills, now is the time.

The 5% deposit scheme, explained

If saving for a big deposit has been a barrier in the past, the Federal Government’s scheme is a solution. Under the scheme, first-home buyers only need to save 5% (or 1/4) of the 20% needed to avoid Lenders Mortgage Insurance (LMI) and the Federal Government will guarantee the rest.

To put this into context, let’s say you’re buying a $400,000 house. Instead of a $80,000 deposit, you’ll only have to put down $20,000. This initiative can shave years off your entry into the property market.

For home and land packages, the HomeBuilder scheme is popular. The $688 million package aims to provide 27,000 grants of $25,000 by December.

Low interest rates & investor demand

New home buyers (people buying first house) accounted for almost a third of all owner-occupied home loans in July – up a quarter from a year ago.

If you’ve been sitting on the fence, unsure whether home ownership is in your future, the current climate might help you decide. But, as always, be honest and realistic about your personal situation. Take a look at first-home buyer checklists. While securing finance is a big step, long-term stability is most important.

Do you have a secure job? Are you ready for the responsibilities of owning a home? Is it something you’ve always dreamed of? Do you have an Adelaide Hills suburb in mind? These are all good questions to ask yourself (and a real estate agent) if you’re looking at buying your first home.

Not ready to live in it? Let us manage it.

Home ownership might feel right to you but moving into the place doesn’t. If that’s the case, our team of property managers can handle your Adelaide Hills home. You can enter the market as a property investor, rather than live in it.

Interested in learning about our property management service? Would you like to learn more about Government assistance for first-home buyers? Call us on 8391 5004 or use this contact form and we’ll reply within 24 hours. In our 20-year history, we can tell you this: 5% deposit plus no Lenders Mortgage Insurance doesn’t come around too often. Maybe never again.

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