It’s Not All Doom And Gloom for First Home Buyers

The media, especially the weekend newspapers, are doing a great job of convincing young people that they will never get into the property market. I strongly disagree with this, particularly with the comments made in one publication where it can take 7-8 years to save for a deposit. I believe there are some good opportunities to buy your first home in NSW with the government schemes currently available that can be taken up in a much shorter timeframe.

The First Home Guarantee allows a first home buyer to only require a 5% deposit to buy their home. There are a few requirements for this, the major one being the maximum purchase price of $900,000.

The First Home Buyer Assistance Scheme allows a first home buyer to pay no stamp duty on their home purchase, if the property is valued no higher than $800,000. There are discounts up to $1mil purchase price.

So if you purchase a property for $800,000, you require only $40,000 deposit, plus a few thousand dollars for legal fees and property inspection fees. Certainly nowhere near the 20% deposit figure quoted by the media.

You may say that an $800,000 purchase price is not high enough to buy what you want to buy, in an area you want to live in. Examples of $800,000 properties in Sydney are (using examples of where some of my clients live):

· In St Marys, a small 3 bedroom home requiring renovation, or a brand new 4 bedroom townhouse

· In Greystanes, a 2-3 bedroom villa or a 4 bedroom apartment in neighbouring Pemulwuy

· In Kellyville, a 2 bedroom apartment or a 3 bedroom apartment in Rouse Hill

· In Dee Why, an older-style 2 bedroom apartment

Remember that this does not have to be your forever home, but it gets you into the property market without the exorbitant stamp duty (legal fees) usually required to be saved on top of your deposit. Once its value increases, use it as a stepping stone to upgrade either in size or location.

My first property was a tired-looking 3 bedroom townhouse near St Marys, bought in 2000 for $148,000, taking advantage of similar government incentives that are currently available. I had a look online and a townhouse in that complex sold earlier this year for $500,000. That property would today, utilizing the above stamp duty and low deposit schemes, require a deposit of only $25,000. It certainly isn’t an attractive property, and many people shared this comment with me at the time, but it enabled me to buy closer to the city a few years later, without requiring any additional cash deposit.

If you’d like to find out more about the government benefits currently available and your eligibility, please call JBL Home Loans on 0414670151 or email on jennifer@jblhomeloans.com.au We can have a look at your current savings and your borrowing potential and come up with a plan to move into your first home.