30,000 new housing grants released - do you benefit?

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30,000 new housing grants released - do you benefit?

On the 1st of July, the Australian Government made 10,000 new places available under the First Home Loan Deposit Scheme, the New Home Guarantee and the Family Home Guarantee, respectively.

This totals to 30,000 new scheme places released to support Australians buying a home. Under the First Home Loan Deposit Scheme and the New Home Guarantee, you can purchase a property with a deposit of as little as 5% without paying lenders mortgage insurance (LMI), which would be typically required for deposits under 20%.

The newly announced Family Home Guarantee lowers the deposit required to 2% without paying LMI for single parents with dependent children, regardless of whether or not you’re a first home buyer.

This is because the federal government guarantees the remaining value of a 20% deposit to the participating lender. There are over 30 participating lenders in the scheme through whom the scheme places are made available.

These spots are likely to be filled within a matter of months – so if you’re interested, it’s a good idea to reach out to your mortgage broker soon. But first, make sure that you meet the eligibility criteria below.

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Six factors affecting property market growth

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Six factors affecting property market growth

In March, the Australian housing market hit its fastest national growth rate in capital gains since 1988. Record low interest rates, heightened consumer confidence due to overperforming economic recovery, and Government stimulus measures such as the First Home Loan Deposit Scheme have spurred demand.

But there are also factors that indicate that this growth is at its peak. A continued boom is unsustainable, and markets are inherently cyclical. According to property market research firm CoreLogic there is unlikely to be a dramatic decrease in the housing market, but that its growth will slowly taper in the next few months – a change that is indicated by the following factors.

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The current property boom highlights a disparity amongst Australians

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The current property boom highlights a disparity amongst Australians

With the start of 2021 came an unprecedented growth in property prices, mortgages, and auctions. Several factors such as record low interest rates, decreased spending on recreation and holiday due to COVID, and government incentives spurred movement in the housing market, as Australians took the opportunity to invest in property.

In July, housing values in Australia increased by another 1.6%, bringing housing values to 14.1% higher over the first half of 2021, and 16.1% higher over the past year, as reported by CoreLogic. Australia’s property market has not seen this pace of annual growth since February 2004.

A combination of record low interest rates and active listings at approximately -26% below the five-year average in contrast to dwelling sales which have reached 40% above the five-year average has contributed to the property boom.

Increased housing values have allowed existing property owners to reap benefits, while despite lowering interest rates, prices soar out of reach for some looking to get in the market.

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Market Essentials - August 2021

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Market Essentials - August 2021

Auctions go digital during lockdown, and house prices in suburbs across all capital cities soar as we enter August.

It seems that not even the economic uncertainty of continued lockdown events has dampened the countries appetite for real estate. In a survey conducted by Finder.com, close to one in seven Australians are reported to be considering a property purchase within the next six months. Approximately 7 per cent of those were looking to buy property as an investment.

Sales of luxury inner-city and CBD apartments are also on the rise, with buyers spending big money on prestige property with state of the art security and top of the line fixtures, finishes and amenities. Property traditionally sold to overseas buyers is now being marketed almost exclusively to domestic buyers.

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Market Essentials - July 2021

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Market Essentials - July 2021

House sellers continue to benefit as the property buying frenzy persists across the country. Meanwhile, leading economists have predicted that interest rates could start to increase as early as November 2022, well ahead of the RBA’s 2024 timeline.

Forward indicators predict a tightening labour market, increases in wages and inflation as early as mid-2022. Combined with the current ‘cheap credit’ on offer and the fastest month-on-month growth in the property market in 33 years, many buyers may soon find higher interest rates beyond reach.

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Market Essentials - June 2021

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Market Essentials - June 2021

Strong conditions in the Australian housing market continue, and June is expected to be another real estate ‘Groundhog Day’.

While more sellers have been lifting asking prices midway through campaigns compared to previous years, Domain’s Dr Nicola Powell says that this trend is easing and “proves that the strong pace of price growth recorded this year is unlikely to continue at such a rapid rate”.

Australia’s combined capital city median house price notched the sharpest quarterly increase in more than eighteen years, with Sydney and Canberra showing the fastest acceleration.

Meanwhile, thousands of investors are expected to offload apartments in the Sydney and Melbourne CBD, with a new survey by ME bank showing that 23% of investors want to sell their property in the next 12 months due to higher vacancy rates and plummeting rents in the CBD.

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