71b02bd6-4b35-4434-82bd-af8c52e11442

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>First home buyers have moved into the space cleared by owner-occupiers and investors, increasing their share of the lending market to its highest levels since 2012. </strong></p><p>First home buyers now account for nearly 30 per cent of owner-occupier lending, committing to 8,411 loans in March — the highest in three months. </p><p>ABS lending data for March showed continued declines in owner-occupier and investor lending, declining 15 per cent and 25.9 per cent respectively over the year. </p><p>First home buyers are now the “one area” of recent relative strength, Corelogic economist Cameron Kusher says.</p><p>“This isn’t really a surprise given how much overall demand has waned,” Kusher said.</p><p>“Stamp duty concession in New South Wales and Victoria as well as improving affordability as prices trend lower has also supported a rise in activity.” </p><p>News of the $500 million scheme aimed at first time buyers is expected to first home buyer market share, with the government offering a loan guarantee for buyers struggling to make the 20 per cent deposit. </p><p>The government will underwrite any shortfall of up to 15 per cent of a home’s value. The scheme will be capped at 10,000 annually. Bill Shorten has said Labor will also support the scheme, which will now be available from next year for buyers who earn up to $125,000 — or 200,000 for couples. </p><p>Related: <a href="https://theurbandeveloper.com/articles/first-home-buyer-scheme-may-push-up-house-prices">Will the First Home Buyer Scheme Push Up House Prices?</a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/f9b8b243-1561-42ad-994c-b74a94a6da4b.jpg" width="920"/></picture><div><span style="align-content:center;opacity:0.8">The $500m first home buyer scheme was unveiled by the Coalition at its formal bid for re-election on Sunday.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Housing Industry Association chief economist Tim Reardon said that intervention is necessary to encourage housing investment.</p><p>“Overall housing finance commitments for the construction and purchase of new homes are now 19.4 per cent lower than they were in July 2017,” Reardon said.</p><p>“Governments have introduced a range of measures over the past three years which have all impacted activity in the housing market. [They] should be reversing the punitive measures and replacing them with more prudent measures, such as assisting first home buyers to save a deposit.”</p><p>Falling prices and better deposit affordability will support first home buyers in the market, ANZ economists Adelaide Timbrell and David Plank <a href="https://bluenotes.anz.com/posts/2019/05/aus-housing--green-shoots-appearing">said</a>.</p><p>“Sentiment also supports the view some green shoot for housing are appearing,” Timbrell and Plank said.</p><p>“Recent consumer sentiment surveys suggest a growing number of households believe it is a good time to buy a home. This likely reflects the improvement in affordability brought about by price declines.”</p></div></div></div></div></div>

First home buyers have moved into the space cleared by owner-occupiers and investors, increasing their share of the lending market.

 First Home Loan Deposit Scheme Extended, Caps Increased

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The federal government will allow an additional 10,000 first home buyers to obtain a loan to build or purchase a newly-built home with a deposit of as little as 5 per cent, via an extension of the First Home Loan Deposit Scheme.</p><p>The scheme, which has already assisted 20,000 first home buyers in purchasing a home this year, will also see caps on the prices of new homes increased from $750,000 to $950,000.</p><p>Treasurer Josh Frydenberg said that the residential construction industry, which currently contributes around 5 per cent to the nation’s overall gross domestic product, remains essential in boosting the Australian economy as it recovers from the coronavirus pandemic.</p><p>“Helping another 10,000 first home buyers to buy a new home through our First Home Loan Deposit Scheme will help to support all our tradies right through the supply chain including painters, builders, plumbers and electricians,” Frydenberg said.</p><p>“Combined, the First Home Loan Deposit Scheme, HomeBuilder and First Home Super Saver Scheme represent an unprecedented level of government support for home buyers and the construction industry alike.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Price caps for extended scheme</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th>State</th><th>Capital city/regional centre</th><th>Rest of state</th></tr></thead><tbody><tr><th>NSW</th><th>$950,000</th><th>$600,000</th></tr><tr><th>VIC</th><th>$850,000</th><th>$550,000</th></tr><tr><th>QLD</th><th>$650,000</th><th>$500,000</th></tr><tr><th>WA</th><th>$550,000</th><th>$400,000</th></tr><tr><th>SA</th><th>$550,000</th><th>$400,000</th></tr><tr><th>TAS</th><th>$550,000</th><th>$400,000</th></tr><tr><th>ACT</th><th>$550,000</th><th>N/A</th></tr><tr><th>NT</th><th>$550,000</th><th>N/A</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup><sub>^ Source: Federal Treasury. Note: The scheme applies only to newly-built homes and runs from 6 October 2020 to 30 June, 2021.</sub></sup></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>An additional 10,000 places will now be provided from 6 October 2020 to support the purchase of a new home or a newly-built home and will be available until 30 June 2021.</p><p>Successful applicants will be able to buy homes worth up to $950,000 in Sydney, $850,000 in Melbourne, $650,000 in Brisbane, and $550,000 in Perth.</p><p>“Australia is in a bit of a demographic ‘sweet spot’ for first home buyer demand, given the relatively large millennial generation are now at a typical first home buyer age,” Corelogic research analyst Eliza Owen told <em>The Urban Developer.</em></p><p>“Over the past 10 years, first home buyers have on average accounted for 23 per cent of owner occupier finance for the purchase of housing, and this has now climbed to 30 per cent.</p><p>“The impact on dwelling values depends on how much of demand-side stimulus is funnelled into new stock.</p><p>“Theoretically the establishment of new housing may not increase dwelling values in the established market, though new builds may become more expensive up to the threshold as demand increases.”</p><p>Related: <a href="https://theurbandeveloper.com/articles/largest-rise-in-home-loans">Record Rise in New Home Lending</a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/0ef5eaab-96e1-4386-ac1e-83da890f2002.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ According to recent Australian Bureau of Statistics figures the value of loans to first home buyers rose by 10.6 per cent in July, 26.6 per cent higher for the year.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>The revitalised scheme will now look to boost construction jobs comes as the Home Builder scheme, available to buyers who enter into a building contract by December 31—if construction commences within three months. winds down.</p><p>Record-low lending rates and strong levels of federal and state grants to encourage new home construction looks also set to push demand for housing credit in states where the virus is seen to come under control and movement and other restrictions lift.</p><p>“The risk is more debt, higher than otherwise prices, and a potential oversupply in the face of the hit to immigration,” AMP Capital chief economist Shane Oliver said.</p><p>“Like Home Builder, it does distract buying from established property and could boost new home prices at expense of established homes.”  </p><p>The extension follows recent findings from the National Housing Finance and Investment Commission, the scheme administrator, which predicts housing demand could fall by up to 230,000 dwellings over the next three years, due to boarder restrictions.</p><p>Unemployment hit 6.8 per cent nationally in August, with the three hardest-hit states being SA, Queensland and Victoria, and youth unemployment sitting at 14.3 per cent.</p><p>The Australian economy contracted by 7 per cent in the June quarter, confirming the nation was in recession following the 0.3 per cent decline in the March quarter.</p></div></div></div></div></div>

The federal government is adding an extra 10,000 places to its first home loan deposit scheme for newly-constructed homes...

For Sale Sign

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The average deposit required by first home buyers has topped six figures as record low borrowing costs, stimulus payments and low stock levels send prices racing higher.</p><p>Recent Australian Bureau of Statistics data has revealed the national average deposit needed to secure a mortgage is now $106,743—an increase of 16 per cent since January, 2019.</p><p>It is the first time in Australia&#x27;s history the average deposit has exceeded $100,000.</p><p>For first home buyers it means a longer path towards homeownership with the burden of raising a deposit—based on <a href="https://theurbandeveloper.com/articles/corelogic-housing-values-australia-record-high">higher values</a>—greater than ever.</p><p>According to comparison website Finder, which surveyed more than 1000 first-home buyers, one in four first home buyers need between five and 10 years to save a 20 per cent deposit.</p><p>More than a third of respondents—38 per cent, require between two and five years to save for their deposit.</p><p>The ACT had the largest house deposit increase since 2019, with the upfront amount required surging by 24 per cent to $117,790 as the rise in entry-level house prices exceeds wage growth.</p><p>NSW was just 1 per cent behind at 23 per cent for an average of $128,469.</p><p>The average deposit in Tasmania has climbed to $81,438, in Queensland it is now $95,784 and up to $92,784 in Western Australia.</p><p>South Australia remains the only capital city offering stable conditions for first home buyers with the time to save for a deposit for a house or unit remaining the lowest in the country.</p><p>First-time buyers&#x27; new loan commitments made up 35.1 per cent of February&#x27;s <a href="https://theurbandeveloper.com/articles/home-loans-house-prices-slow-abs">near-55,000 monthly loans</a>, more than investors’ 22 per cent, and have continued to grow. </p><p>While first home buyer loan commitments fell 3.3 per cent in February, they remain near 12-year highs, up 65.8 per cent year on year.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Average first home buyer loan, deposit</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th></th><th>Average first home buyer loan</th><th>Average first home buyer deposit	</th><th>Increase since 2019</th></tr></thead><tbody><tr><th>ACT</th><th>$471,161	</th><th>$117,790	</th><th>24%</th></tr><tr><th>NSW</th><th>$513,876	</th><th>$128,469	</th><th>23%</th></tr><tr><th>NT</th><th>$400,000	</th><th>$100,000	</th><th>20%</th></tr><tr><th>TAS</th><th>$325,751	</th><th>$81,438	</th><th>17%</th></tr><tr><th>VIC</th><th>$452,369	</th><th>$113,092	</th><th>16%</th></tr><tr><th>WA</th><th>$371,048	</th><th>$92,762	</th><th>14%</th></tr><tr><th>QLD</th><th>$383,136	</th><th>$95,784	</th><th>13%</th></tr><tr><th>SA	</th><th>$342,840	</th><th>$85,710	</th><th>8%</th></tr><tr><th>Australia</th><th>$426,971	</th><th>$106,743	</th><th>16%</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup><sub>^Source: Finder, ABS loans data. Analysis assumes a 20 per cent deposit</sub></sup></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The pandemic-induced downturn that gripped the nation for much of 2020 cut nearly half a year off the time needed to save for a deposit, according to figures published by the Australian Institute for Progress earlier this year.</p><p>The national figures showed an improvement due to the price falls in Australia’s two biggest cities during the quarter, even as the situation in individual cities varied.</p><p>Repayments and deposits fell in Sydney, Melbourne, and Hobart but rose in Brisbane, Adelaide, Darwin, Canberra, and Perth.</p><p>Finder spokeswoman Sarah Megginson said that saving for a house deposit is a big financial hurdle for first home buyers, with more than half of first home buyers—53 per cent—spending more than 30 per cent of their income in order to meet mortgage repayments.</p><p>“Prospective buyers are being stumped by a supercharged property market, which isn’t showing any signs of slowing down just yet,” Megginson said. </p><p>“Low interest rates have made it cheaper to pay down a mortgage, but this has pushed up property prices, making it even harder to save for a deposit.”</p><p>Record low interest rates—RBA governor Philip Lowe has said the benchmark cash rate would likely stay at 0.1 per cent for the next four years—are keeping repayments low.</p><p>Current interest rates have also pushed home values to new highs while making the return on any savings minimal.</p><p>The surging prices that last month pushed the housing market up 2.8 per cent, the fastest pace of appreciation in 32 years, have created several inflection points across the market with Sydney and Melbourne staging a<a href="https://theurbandeveloper.com/articles/house-prices-unit-prices-australia-cities-regional"> full recovery</a> from earlier downturns.</p><p>At the same time, data released by the REIA showed housing prices had soared by more than <a href="https://theurbandeveloper.com/articles/house-prices-up-500-per-cent">500 per cent</a> during the past 25 years, with the median price surging from $160,000 in 1996 to $825,000 in 2020.</p></div></div></div></div></div>

 Aspiring homeowners now need a six-figure deposit to purchase a property, according to new research by comparison website Finder...

Buyer Flock from ‘Liveable’ to ‘Affordable’ Suburbs

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Covid-19 has opened a window for buyers in well-serviced, well-located suburbs that 12 months ago would have been out of reach, national property research consultancy Macroplan says.</p><p>Buoyed by cheap debt, buyers are increasingly shunning dense urban centres and “liveable” suburbs, instead eyeing “affordable” areas where they can live at a safe distance from their neighbours and embrace flexible work arrangements permanently.</p><p>For many workers, not having to commute to work every day has meant homebuyers are now looking at suburbs a few kilometres further afield from the CBD than they would have ordinarily considered.</p><p>Recent reports have <a href="https://theurbandeveloper.com/articles/house-price-drop-starts-to-slow">suggested</a> that house prices will continue to fall during the next year or so as government stimulus tapers off and unemployment potentially rises, in turn further deteriorating household incomes, improving affordability for buyers.</p><p>Population growth, a key driver in the housing market, is forecast to fall from 1.2 per cent in 2019-20, to just 0.2 per cent in 2020-21, and 0.4 per cent in 2021-22, while the population is expected to be 1 million people fewer than forecast last year.</p><p>Macroplan founder Brian Haratsis said despite the downturn in immigration, detailed population forecasts in the budget suggested affordable suburbs were primed for enquiry and subsequent price increases.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/0204d4be-63d0-477c-bdf4-ca07cceb3199.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ A recent global survey of 10,000 office workers conducted by CBRE found that 85 per cent of respondents would prefer to work remotely two or three days a week in the future.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>“In Brisbane and Perth it will be due to ongoing increasing mining investment while in Adelaide it will be caused by the naval shipbuilding program,” Haratsis said.</p><p>“In Melbourne and Sydney it will be caused by flight from the CBD and the suburbanisation of jobs.”</p><p>Residential vacancy across inner city areas has continued to <a href="https://theurbandeveloper.com/articles/covid-polarises-residential-rental-market">rise</a> while rent has continued to <a href="https://theurbandeveloper.com/articles/covid-polarises-residential-rental-market">fall</a>, sagging by 3.1 per cent for houses and down 5.5 per cent for units during September.</p><p>According to Corelogic’s September home value index, property values fell 0.9 per cent in Melbourne and 0.3 per cent in Sydney, but rose 0.8 per cent in Adelaide, 0.5 per cent in Brisbane, 0.2 per cent in Perth and Canberra, and climbed 1.6 per cent in Darwin</p><p>Aspiring purchasers have flocked back to the market in recent months, with the value of all housing-related lending surging by a massive 12.6 per cent in August, in search of accessible pricing.</p><p>Indicators of rising demand in affordable suburbs are often determined by high auction clearance rates, low vacancy rates, low discounting and quick selling times.</p><p>Haratsis said August <a href="https://theurbandeveloper.com/articles/building-approvals-august">dwelling approval</a> results revealed increasing demand for detached housing  in the wake of the relaxation of restrictions in most states and territories, however, approvals for apartments remain weak—at near eight-year lows.</p><p>“These approval numbers mask the impact of first home buyers in the marketplace,” Haratsis said.</p><p>“In August, they reached 37 per cent of all owner-occupier dwellings and have driven lending indicators to new highs without the influence of investors.”</p><p>Looking away from metro centres, a recent report published by Corelogic identified the best-performing affordable suburbs nationwide for prospective first home buyers and first-time investors. </p><p>Topping the list was Broken Hill in NSW, where the median value of houses has increased by 30.7 per cent over the past 12 months to $120,000.</p><p>In Victoria, the historic town of Orbost in East Gippsland’s Snowy River country saw values surge 25.6 per cent to a median $200,500 across the year. </p><p>In Queensland the standout performer was the coal mining town of Moranbah, where the median value of houses has lifted 23.9 per cent to $238,000, riding the cyclical nature of the resources industry.</p><p>Corelogic defined affordable suburbs as having a median price of less than $500,000, ranking them according to capital growth over the past 12 months. </p><p>To make the list, suburbs also had to show good historical growth over three- and five-year periods.</p></div></div></div></div></div>

Covid-19 has opened a window for buyers in well-serviced, well-located, middle-ring suburbs that 12 months ago would have been out of reach...

81646231-b9eb-49e3-8690-a7736bb19ad5

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The NSW government has pushed to temporarily pause stamp duty for first home buyers purchasing newly-built properties in a bid to bolster the state’s ailing construction industry.</p><p>On Monday premier Gladys Berejiklian announced the new scheme which she said would build on the $10,000 first-home owner grant which is accessible to those purchasing a home worth less than $600,000 or for those building a home worth $750,000 or less. </p><p>The stamp duty concession sees the threshold for stamp duty increased from $650,000 to $800,000. </p><p>For homes worth between $800,000 and $1 million, the concession gradually phases out.</p><p>NSW treasurer Dominic Perrottet said the changes would save first home-buyers up to $31,335 on a new $800,000 home and up to $15,668 on a new $900,000 home.</p><p>The $78 million stamp duty relief package will also apply, on a scaled basis, to newly-built homes valued between $800,000 and $1 million as well as to vacant land worth up to $400,000.</p><p>The NSW government hopes easing the burden of buying a newly-built property will stimulate the construction sector, which employs upwards of 400,000 workers across the state.</p><p>Related: <a href="https://theurbandeveloper.com/articles/land-tax-stamp-duty-change-for-property-market-nsw-financial-review">Tax Shake-Up to Rock Property Market</a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/052842ad-44f8-4c8b-92b1-4b0eda864d24.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ The new scheme will apply to newly-built homes and vacant land and will last for one year from 1 August. </span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>“Thousands of people will see their bank balances benefit from this change—it will help get more keys into more front doors of more new homes,” Berejiklian said.</p><p>“It will also boost housing construction across NSW and support jobs in the building industry at a time when we need them more than ever before.”</p><p>The unemployment rate in NSW rose to 6.9 per cent in June as the national rate hit a two-decade high.</p><p>The chief executive of advocacy group Urban Taskforce, Tom Forrest, said the government’s approach to decision-making had worked well to date in dealing with the pandemic, but the same approach needed to be adopted in relation to the vexed issue of tax reform.</p><p>“The problem with stamp duty and payroll tax is they are distortionary,” Forrest said.</p><p>“They have the effect of creating a bias in the property market which slows down property transactions, and payroll tax is simply a tax on employment—it is nuts.”</p><p>“[The Urban Taskforce] has publicly called for the abolition of stamp duty and its replacement with a broadly based land tax or an extension of the application of the GST.”</p><p>NSW chief executive of the Urban Development Institute of Australia, Steve Mann, said the first homebuyer stamp duty relief package may not be enough to see significant recovery from Covid-19.</p><p>“We need to see stimulus across a broad range of homebuyer profiles, including upsizers who need to accommodate family growth, downsizers who are looking to offload larger mortgages and investors who play an important function in our rental market,” Mann said.</p><p>Housing Industry Association NSW executive director David Bare also weighed in, stating the scheme changes would create stamp duty arrangements that “better reflected” the price of new homes across the state.</p><p>The NSW government has been looking to reform stamp duty as part of a major federal financial review commissioned last year by  Perrottet and published earlier this month. </p><p>The year-long review, led by former Telstra chief David Thodey and includes former New Zealand prime minister Bill English and former federal finance secretary Jane Halton, recommended stamp duty should be abolished, with homeowners given the option to opt-in to a land tax.</p><p>The report also suggested that state governments, in consultation with the Commonwealth, consider options for lifting the GST rate and expanding its base over the medium to longer-term.</p><p>Federal treasurer Josh Frydenberg has previously ruled out an increase in the GST, and said if the states wanted to embark on tax reform they would get no financial support from the government.</p><p>NSW estimates stamp duty costs the state economy about $2.35 for every collected dollar in lost income, compared with an estimated 16 cent for an annual land tax. </p></div></div></div></div></div>

The NSW government has pushed to temporarily pause stamp duty for first home buyers purchasing newly-built properties.

FIRST HOME BUYERS