The new Federal Government HomeBuilder grant is set to ignite affordable locations and further help first-timers across the nation. The HomeBuilder program will be of huge assistance to the construction sector over the next six months, which is good news for everyone given the industry’s importance to the overall health of our economy.
The eligibility criteria of the scheme, including maximum income and purchase price limits, means that it will likely benefit first home buyers as well as buyers in more affordable areas the most.
First home buyer incentive
The HomeBuilder grant program will provide $25,000 for the construction of a new property, which for first home buyers will be additional grant funds to what is already available.
In most States, there are First Home Owner Grants for the construction of new homes already in place.
In NSW, it is up $10,000, in Victoria the grant is up to $20,000 (depending on the location) and in Queensland it is $15,000.
So, a quick calculation shows that first home buyers could receive up to about $35,000 to $45,000 between the two grants depending on which they state they live in and where they buy.
On top of that, most states have stamp duty concessions for first home buyers, which sees them pay no, or a much reduced, transfer fee.
Plus, there is the existing First Home Loan Deposit scheme that provides deposit guarantees for first home buyers who have a deposit size as low as five per cent of the purchase price.
This scheme means first-time buyers don’t need to pay Lenders Mortgage Insurance, which is another significant saving for them.
So, with all of these schemes and incentives bundled together it’s fair to say it’s the best time to be a first-time buyer in a very long time!
However, like any significant financial decision it is imperative that they access expert advice before proceeding with a property purchase.
That’s because it is a long-term financial commitment that could have negative connotations if they select the wrong location or construct an inferior dwelling type.
Affordable areas set to shine
All the various grants outline above, including the HomeBuilder program, have one thing in common mind you – and that’s the maximum purchase price, which is $750,000.
In some cities, like Sydney and Melbourne, that won’t buy you much real estate anywhere close to the city, but in others, like Brisbane, it will.
However, in outer ring and regional areas, where property prices are more affordable, the numbers change and with it so do the opportunities.
With the maximum price point for the HomeBuilder program set at $750,000, I believe it will be the more affordable areas that will benefit the most.
My picks in Sydney would be the west and south west, as well as the Hunter region.
In Victoria, areas such as Geelong, Ballarat as well as Melbourne’s western and south-eastern suburbs are set to strengthen from this new activity and demand.
In Queensland, where affordable property is almost its middle name, the outer ring suburbs of Brisbane, such as the Logan, Moreton Bay and Ipswich regions, are on track for good times.
But so is the Sunshine Coast, where there is a huge number of major infrastructure projects under way already.
At the end of the day, the HomeBuilder program is designed so stimulate a major part of our economy but the by-products of it will be more people becoming property owners as well as improved market conditions in myriad affordable locations.