This is a pretty good time to be a first-home buyer, according to one of Australia’s leading property economists.
Ray White Group Chief Economist Nerida Conisbee said there are four things in favour of first-home buyers right now:
- Property prices are lower than this time last year.
- Owning has become more appealing because rents are rising rapidly and rental accommodation is hard to find.
- Unemployment is very low.
- Wages are growing.
That said, Ms Conisbee also noted that first-home buyers faced three main challenges:
- Interest rates have increased.
- There aren’t many properties for sale.
- Buying a new-build home has become a lot dearer.
Still, more first-home buyers are overcoming these challenges and getting into the market, Ms Conisbee said, citing Australian Bureau of Statistics data.
“After hitting an almost record high in January 2021, the number of first-home buyers more than halved,” she said.
“However, in March [the most recent month for which we have data] we saw a tentative return with the number increasing by 15% in one month. The number of first-home buyers is still at very low levels but they do seem to be returning.”
First-home buyers receive budget boost
Ms Conisbee said measures announced in the recent Federal Budget were a further boost to first-home buyers, with both the First Home Guarantee and Regional First Home Buyer Guarantee being expanded.
From 1 July 2023, friends, siblings and other family members will be eligible for joint applications under these schemes – previously, they were limited to singles or couples (whether married or in a de-facto relationship).
The First Home Guarantee is open to 35,000 eligible first home buyers each financial year and the Regional First Home Buyer Guarantee to 10,000.
Under these schemes, eligible first-home buyers can enter the market with just a 5% deposit, without having to pay lender’s mortgage insurance.
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