Many first home buyers will be aware of the Australian Government’s 5% First Home Guarantee Scheme. With as little as 5% deposit, first home buyers can get into the market.
The Government has thrown caution to the wind: income caps are gone, price caps have been significantly extended (SE QLD from $700k to $1 million, Sydney from $900k to $1.5 million), and the annual cap on places is now uncapped.
The trouble is that the Government has thrown a barrel of petrol over the already simmering fire of the first home buyer market. By dramatically pushing the price caps out they have effectively repriced the market. First home prices will quickly gravitate to these levels.
They have unnecessarily fueled demand at a time when the housing market was already heaving under the weight of lower interest rates, high immigration and low unemployment — without addressing the supply side.
What should Kiwis do?
- Sort out your deposit — you need 5% (+ costs). If relying on transferred KiwiSaver, get this approved and withdrawn so you have funds ready to go.
- Get a home loan pre-approval. Get a good Kiwi broker in your corner.
- Get on the lists of agents and homebuilders so you can access new listings before they hit the general market.