Will the future property market provide a win for Australian first home buyers?

Home values have been soaring in recent months, but with value growth starting to settle down, first home buyers are well-placed to get into a place of their own sooner.

Article published 04 May 2021

The current property market spells ‘opportunity’ for first home buyers, but some expert help landing your first home loan is more important than ever.

Value buying still possible

After a long stretch of rapidly rising values, CoreLogic says the property market is seeing a slowdown in price growth1.  And there are still opportunities for value buying.

Apartments a lot more affordable than houses.  Across the state capitals, house values rose 8.6% in the first four months of 2021 – that’s double the pace of apartment price growth (4.3%)2. So, it’s still possible to find an affordable home in the apartment market.

This is all welcome news for first home buyers, especially as it comes at a time when there is plenty of support available to take that all-important first step into the market.

Let’s add up the benefits available.

Home loans rates below 2%

Home loan interest rates are still at historic lows – better still, the Reserve Bank has made it clear that rates are unlikely to rise before 20243. That’s very reassuring for anyone buying a home – especially first home buyers.

With rates on our lending panel starting from 1.79%* (comparison rate 3.36%)#, it’s fair to say home loan interest rates are more affordable than ever before.

Talk to your Mortgage Choice broker about the best deal on a loan that matches your needs. You could be surprised how low the rate is!

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First home loan deposit scheme – buy with just 5% deposit

The FHLDS helps eligible first home buyers build or purchase a new home with a deposit as low as 5%, without the need for lenders mortgage insurance.

That’s more than a massive saving – the FHLDS could let you buy a $500,000 home with a deposit of just $25,000.

The FHLDS can be used to build or buy a:

  • newly-constructed home
  • off-the-plan home
  • house and land package
  • land and a separate contract to build a new home.

Not every bank offers the FHLDS, so it’s important to speak with your Mortgage Choice broker to know if you’re eligible, and focus on those lenders that are part of the Scheme.

First Home Owner Grant – still available

It’s been around for a while, so it’s easy to overlook the value of the First Home Owner Grant (FHOG) as part of your home buying process. But it can be worth big bucks. In regional Victoria for instance, first home buyers can claim a $20,000 FHOG4.

Don’t forget, if you’re eligible, the FHOG can be used as part of your deposit.

Download our free FHOG guide below to know what the FHOG is worth in your area, or talk to your Mortgage Choice broker for tailored advice.

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First home buyer 2022 grants guide

If you're looking at buying your first home it's worth knowing what Government help is available. This guide will walk you through all the grants and schemes to help you save.

Download now

So, where are prices heading?

Will the future property market provide a win for Australian first home buyers? We believe so. CoreLogic is expecting housing values to continue rising throughout 2021 and into 20225. That’s definitely an incentive to buy now before prices rise further.

What about the longer term? History has repeatedly shown that property has a strong track record of long term price growth, and the expression, ‘the only time your home seems expensive is when you buy it’ certainly rings true.

As a guide, five years ago the median Sydney home value was $730,0006. Today that figure is $950,457. In fact, the past five years have seen capital city home values nationally rise from $550,000 to $705,375.

As this period includes the disruption and uncertainty of the COVID pandemic, it’s hard to see home values going backwards any time soon.

Clearing up the ‘what if’s

Buying a home can seem like a complicated process. Your Mortgage Choice broker makes it easy, letting you know how much financial support you’re eligible for through the First Home Owner Grant, stamp duty concessions and the First Home Loan Deposit Scheme.

More importantly, your broker can pinpoint the loan and lender best-suited to your unique needs, and where possible, tap into their industry experience to negotiate a better rate.

It makes speaking with your Mortgage Choice broker a sensible part of your first home buying strategy. It’s like having an expert on your side to help make home ownership easier to achieve – and with the right loan in place – more affordable.

If you’re thinking about buying your first home, contact your local Mortgage Choice broker today to start the ball rolling.

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Posted in: First home buyers

1 https://www.corelogic.com.au/news/home-values-continue-rise-pace-growth-loses-steam-april
2 https://www.corelogic.com.au/news/home-values-continue-rise-pace-growth-loses-steam-april
3 https://www.rba.gov.au/media-releases/2021/mr-21-04.html
4 https://www.sro.vic.gov.au/first-home-owner
5 https://www.corelogic.com.au/sites/default/files/2021-05/210503-CoreLogic-HVI-May21-FINAL.pdf
6 CoreLogic RP Data Hedonic Home Value Index, April 2016