Buying your first home on the Gold Coast? Gold Coast First Home Buyers are the big winners of the new Federal Home Loan Deposit Scheme, writes Property Lawyer and Attwood Marshall Lawyers Partner, Barry van Herdeen.
Details of the Federal Home Loan Deposit Scheme allowing First Home Buyers to purchase a property with a low deposit have this week been announced, much to the anticipation of those hoping to get their foot in the property market. While it can take 10 years for the average first home buyer to save a 20% deposit, the Federal Government’s scheme will help First Home Buyers on low and middle incomes to purchase a home with a deposit of as little as a 5% deposit. The scheme will be administered through the National Housing Finance and Investment Corporation (NHFIC) in partnership with some lenders and will support 10,000 first home buyers each financial year. The scheme will also prioritise smaller lenders to boost competition. The scheme has certain criteria which mean that buying your first home on the Gold Coast will be easier.
How the Federal Home Loan Deposit Scheme works
- If you’ve saved 5% of the purchase price of your property the government will guarantee the remaining 15% of the deposit
- You will still need to borrow 95%, but you can avoid Lender Mortgage Insurance
- Eligible first home buyers can’t be earning more than $125,000 a year ($200,000 for couples)
- Access to the scheme is limited to 10,000 borrowers
- The value of eligible homes under the scheme will vary by region
- The scheme starts on 1 January 2020 and is limited to 10,000 borrowers per year
Fine print on the Federal Home Loan Deposit Scheme
- There are around 110,000 first home buyers in the market each year: 11 times the places available.
- You still have to pay back the loan as normal, but it’s bigger. The scheme could see you put down a deposit of $35,000 for a $700,000 property in Sydney. This means your mortgage would be for 95% of the purchase price, or $665,000
- The price ‘caps’ for properties you can buy under the scheme don’t go near the median house prices in the major capital cities
Why is the scheme capped?
Limiting the scheme to just 10,000 applications means it won’t make a detrimental impact on already highly competitive market prices at the bottom end of the housing market.
Buying my first home on the Gold Coast
The Federal Home Loan Deposit Scheme is designed for people struggling to save the deposit needed to enter into the housing market, however, with its price caps, it restricts what type of property you can buy.
You’d be hard-pressed using the scheme in Sydney and Melbourne, where the median house price is over a $1m and $855,428, respectively, and under the scheme, no property in Sydney over $700,000 will qualify and nothing in Melbourne over $600,000 fits either.
If you want to live in Brisbane, the Gold Coast, or the Sunshine Coast a $475,000 limit applies, which leaves a good opportunity for First Home Buyers who want to buy a unit on the Gold Coast.
On the Gold Coast, the median apartment price is $425,000.
Hurry – Gold Coast Property prices tipped to soar
If you live on the Gold Coast, you better get in quick.
QBE’s Australian Housing Outlook 2019-2022 report for the Gold Coast has predicted the city’s median house ($625,000) and apartment ($425,000) prices will increase by at least $50,000 within three years. The report attributed population growth, a steady supply of infrastructure projects and a strong tourism industry to the expected rises.
Buying your first home? Attwood Marshall Lawyers offer free pre-signing contract advice. Don’t risk your most important investment with a cheap conveyancer, call Property and Commercial Department Manager and Senior Conveyancing Paralegal Jessica Kimpton on 07 5506 8214 or email firstname.lastname@example.org today! Office locations: Robina Town Centre, Coolangatta and Kingscliff, NSW.