First Home buyers can’t afford to buy a home - Not true!

26 Apr

Many people jump to this conclusion without having done any research or gathering the facts - my research and knowledge of the market shows a different picture.

It definitely is more difficult to buy your own home than it has been in the past because:

Housing prices have increased significantly - over the last 30 years houses have increased in price by 453.1% and units by 306.7%[1]
Consecutive interest rate rises over the last couple of years
New housing being built is decreasing, lowering the stock of houses available for sale and rent - 2023 came in at the lowest level in 11 years[2]
Immigration has increased especially since the pandemic putting further pressure on housing - in 2022-23 migrant arrivals increased 73% to 737,000 from 427,000 arrivals the year before[3].

Both Australian and State/Territory government’s have recognized this issue and have started to implement programs to assist first-time home buyers. While there is still a lot to do to address broader market shortages of housing and structural economic issues, they do assist people trying to enter the property market. The programs can be broken down into a few categories:

Lower deposit requirements - from 20% down to 5% of the purchase price

Stamp duty concessions - reductions
Shared equity - the government owns a percentage of your home
New home grants of up to $10,000.

There are a number of criteria that must be satisfied to qualify for these programs.

To receive a PDF with more information about each of these categories and programs, simply provide your email below.

The key point here is that these programs and the support offered by governments, and some financial institutions, can make a huge difference in being able to purchase a home. Based on analysis of a $650,000 purchase of an existing house in a metropolitan area – these programs could total approximately $200,000 to $220,000.

The potential is that you will be able to buy a house sooner and the repayments will be less.

To help first time home buyers I’ve developed an online course that works through each stage of assessing your ability to buy a home. The course includes deposit and savings levels required, mortgage repayments, government funding, other purchasing and ongoing costs. It also works through how to identify the right type of property for you, how to focus your search, through to purchasing and owning a property.

There are a range of tools and templates to help first-time home buyers understand and manage their mortgage, as well as important financial and property terminology and strategies.

If you’d like to learn more, see my website: www.lifelaunchpad.com.au and the course “Buying a Home”.

[1] Corelogic: The long game… 30 years of housing values (in Australia), 2022

[2] https://www.afr.com/property/residential/new-housing-starts-sink-to-11-year-low-target-more-than-a-third-down-20240410-p5firq#:~:text=Separate%20ABS%20figures%20on%20Wednesday,weather%20delays%20and%20materials%20constraints.

[3] https://www.abs.gov.au/statistics/people/population/overseas-migration/latest-release