With property prices continuously rising and Melbourne’s housing market skyrocketing to a median house price of $843,674 (2017 March quarter figures according to Domain), for first home buyers the struggle is real. If you are saving to buy your first home, make sure you’re aware of these resources, grants and upcoming changes which may help you towards that goal.
Budgeting apps – Saving for a deposit is predominately the biggest struggle that first home buyers face and when it comes to budgeting, many people don’t know where to begin. A range of budgeting apps such as ‘Daily Budget’ and ‘Wally’ can be a useful starting point to keep track of your day to day expenses.
Advice from a mortgage broker – ‘You don’t know what you don’t know’. Brokers can help you evaluate your situation as a whole and suggest a range of options tailored to your individual circumstance. Often family members are able to help with deposits by acting as a guarantor where required.
First Home Owners Grant – The grant application must be made within 12 months of settlement or building completion. The grant can range from $10,000 to $26,000 for those eligible, depending on the state you are located in. For detailed information see www.firsthome.gov.au.
Making sense of some upcoming Government-backed changes:
- Stamp duty – For all contracts signed from July 1st 2017, first home buyers will no longer need to pay stamp duty for any properties priced at $600,000 or under. Stamp duty will also be reduced on a sliding scale for properties ranging from $600,000 to $750,000. This will apply to both new and established property provided buyers live in the property for a minimum of 12 months.
- First Home Owners Grant – From July 1st 2017, the First Home Owners Grant will double from the current $10,000 to $20,000 for new home purchases valued up to $750,000 in regional Victoria. Note that this only applies to new properties and does not apply to established homes.
- HomesVic scheme – Starting from January 1st 2018, the government will provide up to 25% equity for first home buyers purchasing property in Victoria. Eligibility:
- Single buyers – income of up to $75,000
- Couple/family – combined income of up to $95,000
This will help first home buyers enter the market with only a 5% deposit as opposed to the 20% deposit normally required and thus eliminating the hefty costs of lenders mortgage insurance. In turn it will also reduce the loan amount required and consequently reduce interest repayments. After the properties are sold – HomesVic will then recover 25% of equity for reinvestment.
While looking to buy your very own first home can be a very exciting experience, being realistic about what you can afford and making sense of what changes apply to you is paramount.
Please feel free to speak directly to myself or one of Accru Melbourne’s qualified and independent Mortgage Broking Specialists for any queries or lending needs.
By Susie Pei, Accru Melbourne