Latest news with #FirstHomeGuarantee
Daily Mail
4 days ago
- Business
- Daily Mail
We're in the market to buy a house, but there's one huge disadvantage that is making it almost impossible
A frustrated Millennial couple looking to find their forever home say they are being consistently outbid by older, cashed-up Australians at auction. Ashleigh Pullin, 28, and her partner James Mashiter, 37, have put in four offers for homes in Melbourne since April. The couple were pre-approved for a $760,000 home loan with a five per cent deposit under the federal government's First Home Guarantee Scheme after years of saving. The First Home Guarantee Scheme allows eligible Australians to use just a five per cent deposit and avoid paying lenders' mortgage insurance. Under the scheme, they are subject to an $800,000 property price cap, which the couple say is making it difficult for them to compete with older buyers. 'We've put in four offers in total since that time and all of them have been unsuccessful,' Ms Pullin told Yahoo News. 'You get very disappointed because you see the house you put an offer in then goes for another $30,000, $40,000 over, and you're not even competitive.' The couple revealed they, and many other Millennial buyers, are feeling the pressure to enter the market, anticipating further interest rate cuts. The Reserve Bank of Australia (RBA) on Tuesday voted to keep interest rates steady at 3.85 per cent, after a series of rate cuts renewed interest in the property market. Mr Mashiter said the market was reacting quickly. 'We were looking at places that were four-bedroom, two-bathroom and two garages and that was comfortable within what we could afford, it was going for $760,000 to $790,000,' he said. Now, the couple are struggling to find a home with three bedrooms and two bathrooms inviting offers under $800,000. They have been forced to pivot away from their dream area and are now searching for homes toward Yarra and Dandenong, further away from the city. PropTrack's latest Home Price Index said the values of homes had climbed by 0.3 per cent over June. It took Melbourne's annual property growth to one per cent. The median home value is now $10,600 more than it was last year, at $818,000.
News.com.au
18-06-2025
- Business
- News.com.au
Where first-home buyers are snapping up 50pc of properties
Buying your first home remains a strong aspiration in Australia but the pathways into the market are constantly evolving. Some first home buyers prefer to build whilst others favour established properties. Some choose to buy their first property for investment rather than owner occupation. Many are relying on the Bank of Mum and Dad for help with the deposit. Others are taking advantage of government assistance programs like the First Home Guarantee to get on the property ladder. The latest NAB Residential Property Survey looked at first home buyer activity across the five mainland states during the March quarter. The survey showed slightly stronger first home buyer activity in the new housing market (34.2 per cent of total sales) versus the established housing market (32.8 per cent of total sales). There may be stronger interest in new housing due to First Home Owner Grants only being available for new properties. Additionally, house and land packages are attractive to first home buyers because they are usually located in more affordable suburbs on the city fringes. Across the states, new homes are most popular in Western Australia. Almost one in two (47.6 per cent) new home sales in the March quarter went to first home buyers compared to 32.2 per cent of established home sales. New homes were also more popular than established homes in NSW, Queensland and South Australia, but by a much smaller margin than in Western Australia. It's the reverse in Victoria, where first home buyers are much more interested in established homes. About 37.6 per cent of established home sales in Victoria during the March quarter went to first time buyers versus 23.8 per cent of sales in the new housing market. If we divide the data between first home buyer owner occupiers and investors, we also see some distinct trends. For example, NSW recorded the highest portion of both new home sales (15.6 per cent) and established home sales (10.3 per cent) to first time buyers purchasing for investment. What is helping many of these buyers into the market is government support — especially the First Home Guarantee, which allows eligible first home buyers to purchase with a 5 per cent deposit while the Federal Government effectively acts as guarantor on their loans. This bypasses the need for costly lenders' mortgage insurance and has opened the door for buyers who may have otherwise needed many years to save the standard 20 per cent deposit. During the election campaign, Labor promised to expand the First Home Guarantee by removing income caps for applicants, raising the existing property price limits, and providing an unlimited number of loan guarantees. While assistance schemes are making a difference, challenges remain for first time buyers. Affordability is the biggest hurdle across the board. A lack of stock has also made buying difficult, particularly in Queensland, South Australia and Western Australia. The supply crunch may be pushing more buyers to compromise on location or shift focus to building rather than buying established homes, though construction costs remain high. Despite the obstacles, property professionals expect first home buyer activity to increase in the coming year, according to the survey. Lower interest rates and the expanded First Home Guarantee will no doubt help (a start date for the expanded program is yet to be announced). Aspiring first home buyers should prepare for stronger competition in the marketplace by getting pre-approved finance and conducting all their market research as soon as possible.
West Australian
09-06-2025
- Business
- West Australian
Anthony Albanese says Labor will fight ‘frustration' in government and deliver on election promises, in National Press Club address
Anthony Albanese will use his first major speech since winning a second term to promise to fight against growing cynicism and 'frustration' in government. The Prime Minister will put forward his second-term agenda in an address to the National Press Club in Canberra on Tuesday, vowing to 'make a real difference to people's lives'. That includes delivering on Labor's policies to boost bulk-billed GP appointments, decrease student debt and other cost-of-living measures. While he will acknowledge the 'significant global uncertainty' and 'economic instability' currently underpinning the world, he says Labor will be a 'practical and positive alternative' and delivers on its 'vision for a stronger, fairer Australia'. 'It is the more corrosive proposition that politics and government and democratic institutions, including a free media, are incapable of meeting the demands of this moment,' he is expected to say. 'Our responsibility is to disprove it. 'To recognise that some of this frustration is drawn from people's real experience with government – be it failures of service delivery, or falling through the cracks of a particular system. 'To counter this, we have to offer the practical and positive alternative.' Mr Albanese's comments on a volatile international environment comes as he is expected to have his first face-to-face meeting with US President Donald Trump when he travels to Canada for the G7 Leader's Summit over the weekend. Labor faces a heavy policy agenda when parliament finally sits on July 22 for the first time since the May 3 election, with Mr Albanese promising to legislate a 20 per cent discount of student debts as its first priority. Mr Albanese will also highlight Labor's election vow to ensure 90 per cent of GP visits are bulk-billed by 2030, progress on reaching net zero emissions by 2050, and its continued target to build 1.2 million new homes through the Housing Accords as other key areas for 'delivery' in Labor's second term. 'Our second term agenda has been shaped by the lives and priorities of the Australian people. And it is built on Australian values,' he will say. 'It is the mission and the measure of a Labor government to give those enduring ideals of fairness, aspiration and opportunity renewed and deeper meaning, for more Australians. 'To deliver reforms that hold no-one back – and drive progress that leaves no-one behind.' The government will also expand its First Home Guarantee scheme to all first home buyers, regardless of income caps, which allow them to purchase an eligible property with a 5 per cent deposit, while also avoiding lender's mortgage insurance. Labor has also committed to investing $10bn to build 100,000 new homes which will be earmarked for firsthome buyers. Since Labor's election landslide on May 3, it has faced attacks on its plan to bring in a 30 per cent tax on superannuation balances over $3m. While the Greens have already flagged it will work with Labor to most likely pass the tax in the Senate, the Coalition have criticised the policy as a 'grab for revenue'. However Jim Chalmers has rebuked changes to the tax, calling the changes 'modest' and 'methodical,' which will make a 'meaningful difference to the budget'.
Perth Now
02-06-2025
- Business
- Perth Now
The Perth suburbs where units could be your way onto property ladder
Perth's extraordinarily high rental prices make it cheaper to buy units than rent them in nearly 30 suburbs across the metropolitan area. But the catch is, you need a 20 per cent deposit to buy the apartments. The research highlights how high lease costs are keeping a third of the population stuck in the rent trap, paying off a landlord's mortgage — instead of their own — while they struggle to save the required deposit. President of the Real Estate Institute of WA Suzanne Brown acknowledged the odds are stacked against renters. 'It should always be your goal to exit the rental market — whatever that looks like,' she said. 'Perhaps that is buying something you can afford and renting somewhere you want to live. But buying should always be the long run focus.' Ms Brown said renters should not give up, as she regularly saw examples of people who saved a 20 per cent deposit, sometimes in challenging circumstances. Furthermore, major help was coming for first-home buyers through the First Home Guarantee, which will help eligible buyers to purchase with as little as a five per cent deposit without paying costly lender's mortgage insurance. Research by the Real Estate Institute of WA shows 28 suburbs have median unit rents that are higher than weekly mortgage repayments at 6.05 per cent interest over 30 years. Bayswater, Burswood, Beckenham, Perth and Cannington have the highest rental income versus mortgage cost differential. In Burswood, there is almost a $1000 monthly difference between median mortgage repayments ($2737 per month) and median rental income ($3683 per month). While the REIWA research does not include water, council rates and strata fees, separate research by The West Australian shows it is often still cheaper to buy than rent once these costs are included. A two-bedroom city apartment on Murray St, for example, sold for $518,000 in mid May. With a 20 per cent deposit, the owner pays $575 a week to repay the $414,000 loan over 30 years. Water and council rates, and the strata levy, comes to an additional $103 a weekly, leaving the home owner $678 a week out of pocket. An apartment in this city complex sold for $518,000 in mid May and advertised as a rental two weeks later for $725 a week, making it cheaper to buy than rent. The catch is, you have a deposit. Credit: supplied But the very same apartment has this week been advertised as an unfurnished rental property, on a six-month lease, for $725 a week, leaving the home-owner positively geared from day one, nearly $50 a week in the red. In another example, a two-bedroom, two-bathroom apartment in Bayswater sold for $540,000 in October. Buyers would need a hefty $108,000 deposit to buy it, and repay $600 a week for 30 years under 6.05 per cent interest. A further $35 a week is required for the strata fees, and $59 is required each week for council and water rates. With total weekly costs at $694, the owner is still ahead, given an almost identical apartment around the corner is renting for $740 a week. This two by two Bayswater apartment sold for $540,000 in October 2024. Credit: supplied Another examples includes a modern complex in Burswood, which is currently advertising a one-bedroom apartment, with parking space, for $650 a week rent. However, the neighbouring one-bedroom apartment sold in mid May for $465,000. With a 20 per cent deposit ($93,000) a mortgage- holder would repay about $520 a week for 30 years. An extra $94 is required each week to pay water rates, council rates, strata levies and a special deck levy. With total costs at $614 a week, the owner is still ahead. 'Units are a more affordable entry point to the market than houses, particularly in areas closer to the city and lifestyle attractions, and can be good options for people looking to exit the rental market,' said Ms Brown. This one bedroom unit in this Burswood complex sold recently for $465k. Credit: supplied 'Currently capital growth for the broader unit market is on par with the housing market, driven by the strong demand for property. 'In general though, the rate of growth for apartments — in particular — does tend to be lower than for houses. But that is not often a significant factor for people looking to buy their first home. 'For investors, the unit market usually outperforms the housing market for yield. '
West Australian
29-05-2025
- Business
- West Australian
‘Stop giving concessions': Major warning on first-home handouts
Potential first-home buyers are falling further behind due to the very schemes designed to get them into a home. Independent economist Saul Eslake said the best thing the government could do to help first-home buyers would be to remove concessions that allow them to buy a home. 'The question isn't what they should be doing, it's what they should not be doing,' he told NewsWire. 'What they have to stop doing is things that needlessly inflate demand for housing. 'Stop giving out what I call second-home vendor grants as I call them because that is where the money ends up.' 'Stop giving stamp duty concessions, all they do is allow people to pay the vendor what they would have paid to the state government and back away from the mortgage deposit guarantee schemes and shared equity schemes,' he said. Mr Eslake said these policies, which are designed to help first-home buyers, simply end up inflating house prices. 'While a shared equity scheme sounds like a good idea, in practice, if you're willing to buy a $400,000 house and the government says 'hey, we will give you 20 per cent', then buyers say 'oh good, I can now afford a $500,000 house'. 'So a $400,000 house becomes a $500,000 house, so it's more a matter of just stop needlessly inflating demand.' One of the key election policies the Albanese government ran on was its expansion of the First Home Guarantee scheme, which is sometimes called the 5 per cent deposit scheme. This program allows first-home buyers to purchase property with a deposit as little as 5 per cent, with the government effectively guaranteeing the other 15 per cent, allowing first-home buyers to avoid paying lenders' mortgage insurance. But in an updated version of the scheme to come into effect at the start of 2026, caps of $125,000 for singles and $200,000 for couples will be removed. The PropTrack April Home Price Index showed national house prices hit a new record high over the month of April, increasing by 0.2 per cent monthly or 3.7 per cent compared with the same time last year. Australia's Cash Rate 2022 Helia chief executive and managing director Pauline Blight-Johnston said the main risk to the latest policy was the removal of the income caps to get government help. 'Our belief is that we will achieve the most as an economy if the government help is directed towards those that need it the most, and those that are able to help themselves through private enterprise do so without the taxpayers' dollar,' she told NewsWire. 'At the end of the day, our view is that taxpayers' dollars should go to those that really need the help to get into the market, such as essential workers or others that are really struggling.' Ms Blight-Johnston said expanding the HGS didn't address the fundamental underlying issue for those struggling to buy their first home – a shortage of affordable supply. She fears that the government's housing schemes just worsen housing affordability by fuelling demand and driving up prices. Instead, she pointed to first-home buyers using lenders' mortgage insurance as a 'really powerful tool' that is often misunderstood. 'People think of it as a fee …. But if you think of it differently as a wealth creation tool and it allows you to get into a home earlier, on average people that use LMI get in around nine years earlier and around $100,000 better off after five years because they got into the market earlier,' she said. Ms Blight Johnston said mortgage holders would typically pay 1 to 2 per cent as a premium above their usual repayments if they took on LMI. 'If you think property goes up on average 4 or maybe 5 per cent a year, if it is going to take you more than six months to save the deposit, the extra 15 per cent — as LMI takes the deposit down from 20 to 5 per cent – you're going to be ahead by getting into the market earlier and paying the premium.' Mr Eslake said LMI could increase demand for property if it acted like a reduction in interest rates. 'We know whenever interest rates go down, people borrow more and pay more for the house they buy which results in higher prices,' he said.
