Regardless of who you wanted to win in the federal election, it’s hard to argue that the result is likely to be beneficial for prospective first-home buyers. Although buyers may have to wait for the scheme to pass through parliament, the ultimate initiatives will make the prospect of home ownership an easier one.
Without doubt the biggest challenge in life is saving for a deposit. It takes on average four years and 10 months to save a 20 per cent deposit on an entry-level Canberra house and three years and two months for a unit – double this time if you are making the purchase on your own.
Those who qualify for the proposed federal government’s first-home buyer policy will only need to save a 5 per cent deposit, with the additional amount to reach 20 per cent guaranteed under the scheme. This policy will further reduce stress on buyers having to pay lenders mortgage insurance (LMI) and will allow the dream of owning a home to become a reality sooner rather than later.
It’s important to understand that while many first home buyers will have saved their 5 per cent deposit, they may not be granted the additional 15 per cent deposit amount. The scheme is capped at 10,000 applications which roughly equates to one in 10 first home buyers (based on last years figures). The criteria metrics are yet to be determined, however the reason for the cap is if the number was to be unlimited, it would create a heightened demand in affordable housing and therefore it would be likely to support price growth at the lower end of the market.
Those that are eligible for the federal government’s scheme combined with the incoming stamp duty abolishment in the ACT and potential interest rate cuts will be in the best possible position to enter the property market. So the question is, will 2019 be the year of the first home buyer?