Is now a good time for first home buyers to get into the market?

Buying a first home is always a big decision. But there are plenty of sweeteners aimed at helping first home owners buy a place of their own sooner.

Let’s count down the top three reasons why now could be a great time to get into the market.

1. Interest rates are at record lows

Few Australians could ever have imagined that home loan rates would be as low as they are today.

Just 12 months ago, the average variable rate was 3.81%. These days that’s down to 2.91%1. Fixed rates are even lower – at an average of 2.73%.

This is seriously good news for first home buyers. Low rates help to keep monthly repayments down, while boosting your borrowing power.

2. First home buyers can enjoy a valuable helping hand

The big news for first home owners right now is the tremendous level of support available through state and commonwealth governments. This includes:

  • First Home Loan Deposit Scheme – the FHLDS lets you buy a home of your own with just 5% deposit and no lenders mortgage insurance. Conditions apply but as the scheme is only open to 10,000 applicants each financial year, it really is a case of first in, best dressed. If you’ve only got a small deposit, here’s your chance to get into the market sooner.
  • $25,000 HomeBuilder grant – if you’re planning to build a new home or buy a budget-friendly ‘fixer upper’, the HomeBuilder could make it happen with a $25,000 cash grant. Don’t delay though. Your building contract needs to be signed by 31 December 2020 to be eligible.
  • First Home Owner Grant and stamp duty savings – amid all the excitement of new grants and schemes, it’s easy to overlook the FHOG and possible stamp duty concessions.  If you’re eligible, they add up to big savings – and remember, the FHOG can be used as part of your deposit.

The support doesn’t end there. Other states have introduced exciting new grants too. In Western Australia for example, the $20,000 Building Bonus grant is up for grabs for homebuyers who sign up before 31 December 2020 to build a new house or purchase a new home in a single tier development (such as a townhouse)2.

3. The property market is taking a breather

At the start of 2020, it looked as though rising home values could pose a problem for first home buyers. In December 2019, values nationally rose 1.1% in just one month, bringing quarterly price growth to 4.0%3.

More recently, some property markets have shown signs of cooling. According to CoreLogic, capital city home values dipped by a total of 1.3% over both May and June 2020. 

The market may not stay this way for long though. CoreLogic also says that real estate agent activity is now tracking higher than the same time last year, and new property listings are up 42% compared to early May. 

We’re also heading into the spring selling season. COVID-19 may mean it’s a very different sort of season from previous years. But traditionally, buyer activity is strong around springtime, and this could drive a rise in values.

Now is the time to get expert advice

If you’re a first home buyer, the key takeout is to know sooner rather than later if you can take advantage of the opportunities currently available, and with so many factors tipped in favour of first home owners, you could be in a position to buy today.

Give your local Mortgage Choice broker today, they can provide you with the answers you need and identify the home loan that is best suited to your needs and budget.​

For more information about becoming a First Home Buyer check out our Information Centre.

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First home buyer's guide

Purchasing your first property can be an overwhelming process and there may be steps you are unsure or unaware aware of. This guide will walk you through all of the steps involved in the buying process.


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