What the new financial year means for home buyers

The new financial year has come with a number of changes and challenges under COVID-19 for prospective home buyers. However there are also plenty of opportunities to help you get into your new home.

This is what can help you get there.

A new year means a new start for buyers

As of July 1, the Federal Government’s support scheme for first home buyers was reset, meaning another 10,000 eligible house hunters will be granted access.

The First Home Loan Deposit Scheme guarantees to cover up to 15 per cent of the deposit for the property, which means buyers only need to come up with five percent of the home’s value.

As part of the scheme, those applying need to pass several eligibility checks including:

• an income test – an individual’s income can’t be more than $125,000, for couples it is $200,000
• a property ownership test – you can’t have owned property or land in Australia previously
• a minimum age test – you must be 18+ years old to apply
• Deposit requirement – you need to have saved 5 percent of the cost of the home
• Owner-occupier requirement – you need to live in the home within 6 months of completion and for as long as the guarantee (15 percent) remains
• Cost requirement – the maximum cost of the home can’t exceed $700,000

Your home loan should come with a 2

Mortgage home loan rates have fallen below 2 percent for the first time ever.

The Mortgage and Finance Association of Australia’s chief executive officer Mike Felton told The Daily Telegraph,  it was a “tremendous” time for borrowers to snap up rock-bottom deals.

“It’s great for competition and borrowers have never had a better opportunity,” he said.

This means it’s a good environment to be looking for a lender, whether you’re a first home buyer, a family upsizer, empty nesters looking to downsize or an investor.

Given record low interest rates it is a good time to be looking for a new home.

Investor incentives remain

July 1, 2020 was the proposed date former Opposition Leader Bill Shorten had pencilled in, on which to significantly curb negative gearing and capital gains tax breaks if he became Prime Minister. Shorten had proposed the capital gains tax discount would have been cut from 50 per cent to 25 per cent.

The policy would have led to considerable uncertainty for investors and make the real estate market considerably less appealing.

However Scott Morrison’s re-election last year meant Shorten’s policy never came to pass. Therefore with negative gearing and capital tax breaks remaining in place, the real estate market is a far more attractive proposition for investors than it would have otherwise been.

Where the property market is headed

Despite COVID-19, property prices have remained relatively stable.

According to realestate.com.au, housing prices have fallen by just 0.7 percent since the pandemic hit in March. That is a long way from the 30 percent crash, some experts predicted.

Experts say given the government stimulus packages such as HomeBuilder, support initiatives including JobKeeper and lenders pausing mortgage repayments, a housing market crash is very unlikely.

“The market has been remarkably resilient,” Realestate.com.au chief economist Nerida Conisbee said.

“It’s remained far more stable in an environment when we have rising unemployment and a recession.”

As such, it’s a good time to be looking for your new home with Toplace.

To view our current projects, click here, or for help in your search contact us here.