Decisive Government Policy Changes to Help First Home Buyers
First home buyers around New South Wales have witnessed a watershed moment in the battle for housing affordability, with both Federal and State Liberal governments launching historic policy changes to help First home buyers successfully enter the housing market.
The good news comes amid concerns about housing becoming unaffordable in Sydney, as the average price of a family home exceeds $1 million.
Federal Government First Home Buyers Help
In the 2017 Federal Budget several initiatives were announced that are designed to take pressure off rising house prices, and to give First home buyers a chance to get into the housing market.
The Federal Government has responded to housing affordability constraints by introducing a scheme to help First home buyers save for a home deposit through making extra contributions to their superannuation fund that could be accessed later for a first home purchase. It is estimated the initiative will help people save up to 30% faster toward their home deposit.
NSW Government’s Housing Affordability Response
Thankfully, the Federal Government has not been fighting for affordable housing alone. The NSW Government has recently released significant pressure on housing affordability. In a stunning measure which caught many by surprise, the Berejiklian Government announced it will waive stamp duty on properties up to $650,000 for First home buyers.
Combined with the Federal Liberal Government’s recent superannuation saving scheme for First home buyers, the news is good for those affected by high prices in Australia’s capital cities, such as Sydney, Melbourne, Perth, Brisbane and Adelaide.
Matt Ivers, from Vision Property & Finance, says that the housing affordability issue has needed government attention for a long time. “First home buyers have probably felt let down by the government. While Property investors have enjoyed an advantage when applying for property finance, First home buyers have struggled for several years. It has been extremely difficult for them to get a foot in the door.”
Property investors have a big advantage when it comes to securing property finance, says Matt Ivers, because they are able to use the equity they have built-up in their investment portfolio when applying for a loan to buy another property. “Unlike First home buyers, when Property investors apply for a loan to buy a property they often only need to show enough equity in their investment portfolio instead of raising a cash deposit.”
Changes to Help First Home Buyers Own Their Home Sooner
The new Federal Government First Home Super Saving Scheme (FHSSS) will certainly help First home buyers to save a deposit, while the NSW Government’s stamp duty concessions will also help people trying to get a foot on the property ladder. Eligible couples can save up to $60,000 to use as a deposit on a home.
Many will still need to save additional funds for legal fees, building and pest inspections, and any further money required to meet minimum deposit standards. However, for struggling First home buyers the new changes, when combined with the NSW Government’s waived stamp duty fees, is just what was needed to help overcome the affordability crisis facing first time home buyers.
NSW Government Introduces New First Home Owner Grant Scheme
First home buyers in NSW will receive a further boost with the NSW Government scrapping the New Home Grant scheme, instead replacing it with the new First Home Owner Grant which applies to new homes.
Designed to support new home construction throughout the state, the First Home Owner Grant scheme will provide $10,000 to First home buyers who build a new home or purchase a recently built house. The new grant will apply to owner-builders with land and buildings valued up to $750,000 or purchasers of newly-built homes up to $600,000 in value.
Federal and State governments have also introduced a raft of new measures to help First home buyers compete in the housing market, easing the pressure on the market from investors and overseas buyers. These market-supply policy measures will be outlined in a future article.
Vision Property & Finance has a dedicated program to help First Home Buyers reach their home ownership goals sooner.