Just released figures found that first home buyers are trying to enter the property market encouraged by a surge of government incentives.
According to the National Housing Finance and Investment Corporation (NHFIC), the government body in charge of implementing the incentive, one in eight first home buyers in 2020 have dipped into the federal government’s First Home Loan Deposit Scheme (FHLDS).
The popularity of the scheme among first home buyers, an election promise fulfilled by Prime Minister Scott Morrison, rose despite major issues.
Demand for FHLDS in the six months to June 30 continued even though COVID-19 had happened.
First time home buyers from all ages and income groups around Australia filed to qualify for the scheme, and interest was strong from buyers in outer metropolitan and regional areas like Newcastle.
FHLDS was launched on January 1 and was limited at 10,000 qualified buyers. When the limit was reached quickly, it was reset on July 1.
There were a lot of interesting statistics found by the FHLDS Trends and Insights report. These included:
Under the scheme, buyers were able to move forward their purchase by four years on average.
Nearly 70% of buyers bought a stand-alone property, with 25% buying an apartment and 5% a townhouse.
Over 50% of properties purchased in capital cities were located 15-30 km from the CBD, with couples more likely to purchase in outlying suburbs than singles.
Major cities were the preferred location of 62.3% of buyers while the rest bought in regional locations.
The main cohort of key works who availed of the scheme was teachers (37%), followed by nurses (25%).
For houses, the median price was $385,000. In comparison, the median price of apartments was $475,000, as a significant number of units were purchased in capital cities.
The people applying for the scheme were mostly in the 25-34 age group.
The scheme allows buyers to purchase their first property with as little as 5% deposit with the federal government covering the 15% balance normally required by exorbitant insurance.
The strongest demand was seen in Toowoomba in regional Queensland, followed by Campbelltown in south west Sydney, and Cragieburn and Frankston, suburbs in outer Melbourne.
We are still seeing a lot of interest from first home buyers in our office wanting to make a purchase. They see now as a good opportunity to enter the property market.
Our enquiries are coming from individuals, couples and families who want to achieve their dream of owning their own home.
The report once again stressed the lack of affordability of homes near the CBD in Sydney, with a significant number of the people who purchased in the Harbour City buying at least 30 km from the city centre. In all other big cities, people bought within 30 km of the CBD and we are seeing the same trends here in Newcastle though over a shorter distance.
Make your move now to avoid heartbreak
In the report, it was found that nearly two-thirds of the 10,000 capped areas in the FHLDS were filled up within the first two months. Since the two-month period has ended and the second allocation of places was launched on July 1, first home buyers planning to avail of the scheme in the next six months of 2020 should do so immediately.
NSW buyers made up nearly 23% of the 10,0000 qualified applicants, followed by QLD with 18% and Victoria with 16%.
Values throughout the country have been declining marginally in recent months. However, over the last year, prices have increased particularly in Newcastle and the Lake Macquarie areas where prices have hit the peak of the market ant the end of 2017 through to mid 2018.
We are urging first home buyers to get into the market as soon as they can even if they buy a property as a stepping stone to their next one as they may be priced out of the market as it continues to increase.