Despite the soaring cost of living and successive interest rate hikes, homebuying intentions have climbed, latest data shows. So why are so many people still chasing the great Australian dream? And what can you do to make your own dream a reality?
Despite a flurry of rate rises, new data this month shows homeownership is once again a top priority for many Australians, with the number of house hunters increasing.
Commonwealth Bank’s Household Spending Intentions Index showed a strong 14.4% increase in homebuying intentions in May, after dropping in April.
May also saw new home sales increase across Australia for the second month in a row.
So what’s driving this appetite for property when finances are increasingly tight for many? And how can you boost your own chances of cracking the market sooner?
Rental squeeze
Across capital cities and major regional areas, there have been historic rental price increases and low vacancies.
Rental vacancies reached an all-time low of 1.1% in April, with the median price for renting a unit only $39 a week cheaper than renting a house.
Rising overseas migration has contributed to stiff competition in the rental space too – in the March quarter there was a 124% jump in rental enquiries year-on-year from one overseas country alone.
Understandably, many are looking to escape renting and grab their spot on the property market.
But with rate hikes and inflation, saving a deposit is no easy feat for many Australians.
So here are some ways to take the pressure off.
Schemes and grants to save time and money
There are many government schemes and grants designed to help you get into the market. And all can be used simultaneously, which can really bring in the savings!
Through the National Housing Finance and Investment Corporation, the federal government has three low deposit, no lenders mortgage insurance (LMI) schemes available for eligible first-home buyers, regional first-home buyers and single parents.
The First Home Guarantee and Regional First Home Guarantee support eligible buyers to purchase a home with a 5% deposit. And the Family Home Guarantee assists eligible single parents to buy with a 2% deposit.
Not paying LMI can save you anywhere between $4,000 and $35,000 – depending on the property price and your deposit amount – which can fast-track your first home-buying goal by four to five years.
Another home-buying cost that can have a real sting in its tail is stamp duty.
Fortunately for first-home buyers though, state governments have stamp duty concessions available – including South Australia, which announced last week that it was scrapping the tax for first-home buyers on new homes valued up to $650,000.
Meanwhile, Victoria, New South Wales, Queensland, Western Australia, Tasmania, the ACT, and the Northern Territory also offer stamp duty concessions. This can either eliminate or reduce the cost of stamp duty, if eligible.
Most state governments also offer first homeowner grants to help you get the keys to your own home.
Victoria, New South Wales, Queensland, Western Australia, Tasmania, Northern Territory, and South Australia all offer first homeowner grants.
If eligible, you could receive a grant of between $10,000 and $30,000 depending on your state and other eligibility criteria.
Give us a call
It’s important to note that spots for some of these schemes, such as the federal government’s first home guarantee, are limited.
And they’re popular, so it’s best to get in quick.
So if you’d like to kick renting to the curb, get in touch with us today.
We’ll help you work out your borrowing power, your loan options, and factor in what schemes you may be eligible for.
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