What Covid19 means for first home buyers
COVID19 has impacted on all sectors of the economy, and property is no different. But it could present an opportunity for first home buyers.
In March, house prices were up in both Sydney at 14.5 per cent and Melbourne at 12.5 per cent year-on-year. Although sales have dropped, there is still an opportunity for first home buyers to get onto the property ladder.
In fact, buyers searching for Victorian properties on realestate.com.au have jumped 40 per cent amid coronavirus, a sign of optimism returning to the market.
For first home buyers, COVID19 could present an unprecedented opportunity to get into your first property sooner. With many of us spending more time at home, you might be thinking about changing your four walls to be ones you can truly call your own. Is it possible to ditch renting and buy? Signs point to yes. In fact, here’s 6 reasons that show some unintentional positives in the market for first home buyers.
1. Low interest rates
With interest rate offers as low as 2.29 per cent, mortgage repayments have become cheaper than forking out on rent in some locations.
Particularly for dual income households, purchasing a first home is becoming an affordable option.
Now that APRA has relaxed restrictions on how lenders assess a potential lenders ability to meet repayments (dropping the buffer from 7 per cent to 2.5 per cent, getting finance approved can be easier for first-timers.
2. Less competition
Buyers shopping back in February may have found intense competition from investors. With many investors exercising caution, now is a great time for first home buyers with a deposit ready to make a move on a property.
Traditionally, an investor and first home buyer are often on the lookout for the same properties. With the current eviction moratorium, investors are taking a backseat leaving the field wide open for savvy first home buyers.
3. Sellers open to negotiate
With some restrictions on auctions and viewings, sellers are increasingly willing to negotiate on sale price. Bargains are there for the savvy first home buyer.
4. First Home Loan Deposit Scheme
Introduced by the federal government in January, this scheme drops the deposit needed for a non-guardian home loan from 20 per cent down to 5 per cent. For first home buyers with a secure job, eligible applicants could seize upon opportunity here, along with stamp duty exemptions.
If you’ve already successfully applied for the Federal Government’s deposit guarantee, you now have even more time to buy your first home. You can apply for an extension of another 90 days.
From July 1, a further 10,000 guarantees under the First Home Loan Deposit Scheme will become available.
5. HomeBuilder help for COVID19
The federal government has just announced a new $25,000 grant for eligible owner-occupiers (that includes first home buyers) to build or substantially renovate between June and December 2020.
The catch? There’s a few stipulations such as work must start within three months of signing the contract and there is an income cap. Full information can be found through the Treasury.
6. Essential worker? Essential buyer
If you’re fortunate enough to be among the classified essential workers, this can greatly support any pre-approvals for finance.
However, having a solid deposit and a plan in place to minimise your buyer risks is still important.
Finding the right property for your situation comes down to the support from your agent. At Amity, we have an experienced team working across all areas of Melbourne to find and sell the best properties for your budget and lifestyle.
For help finding your first home, contact the team at Amity on 03 9090 2500 or email us at firstname.lastname@example.org.
26 June 2020 News