Purchasing a home is a lifelong goal for many and the current market downturn across Australia might finally be the key to unlocking the property market for first home buyers.
The market has recently recorded declines in dwelling values across all capital cities, excluding Darwin. While this may be concerning for homeowners thinking of selling their property, this market slump provides a great opportunity for people looking to buy a property for the first time.
Decreased property prices in many areas of the country, including here on the Central Coast, have made homebuying more affordable for some as rising interest rates have pushed house prices to decline.
CoreLogic found that in times of decline, demand for loans amongst first home buyers remains strong. Combine government grants, lower house prices and lower deposits, and the current market conditions presents a great opportunity for first home buyers.
Government incentives and schemes
Various government grants and schemes are available to Australians to help in the home-buying process including:
- First Home Guarantee
- Family Home Guarantee
- First Home Owner Grant
- Regional First Home Buy Guarantee
- First Home Super Saver Scheme
Although there are limits on available places and income caps, these incentives are all aimed at helping home buyers purchase their first home sooner. Over the COVID-19 period, the Australian government extended the First Home Owner Grant for an additional year. A combination of low interest rates, changing living preferences, and support for households increased demand for the property market and pushed the government to provide extra support for homebuyers.
During the 2008 downturn that resulted from the Global Financial Crisis, the government introduced the First Home Buyer Boost, providing a grant of up to $21,000 for home buyers, benefiting many Australians during a difficult economic period. As house prices declined, an opportunity for new buyers to enter the market arose with a smaller deposit requirement and much needed government assistance.
As we’ve seen from previous downturns, these grants and incentives have proved helpful to home buyers and assisted many Aussies to enter the market.
Decreased property prices
With declines in property values being recorded across the country, now is an opportune time for first home buyers to purchase a property and reap the long-term benefits, as prices tend to increase over time. While rising interest rates can increase mortgage repayments, the declining value of dwellings is a positive sign for first home buyers who have a large deposit or savings. Furthermore, with properties sitting on the market for longer than usual, buyers may be able to further negotiate selling prices.