Many first-time homebuyers have noticed home prices rise at a record pace over the last year and wondered when they would be able to save enough for a down payment to enter the real estate market. The federal government's recently introduced budget would certainly bring good news for all aspiring home buyers.
According to “Domain” Australia, under the federal budget introduced at the end of March, the government will expand the Home Guarantee Scheme (HGS) by doubling the number of places to 50,000 per year.
The program allows eligible first-time buyers to purchase a property with a 5 percent down payment without having to make a 20 percent down payment on the home price or having to buy mortgage insurance like the average buyers, and the federal government will guarantee the rest of the down payment amount. The program is designed to get people into the real estate market faster.
“Domain” Group's recently released First-Time Homebuyer Report shows that nationwide, the time it takes a young couple to save for a 20 percent down payment on an entry-level detached home has soared to record levels, with the average person taking five years and eight months to save for a down payment on a detached home in the state's capital city.
But with the government's Home Guarantee Program (formerly known as the First-Time Homebuyer Down Payment Guarantee Program), young buyers can reduce the time it takes to save enough for a down payment on a home in the state's capital city to one year and one month.
However, the Home Warranty Program has its limitations.
Under the program, eligible single applicants may not have earned more than $125,000 in taxable income in the previous fiscal year, while couples cannot earn more than $200,000, and buyers must be buying a home for their own use, not for investment.
The biggest restriction may still be the rules on the price cap, which depends on the city or region where the purchaser is located and whether the property purchased is brand new or existing.
With median house prices in major cities such as Sydney currently significantly exceeding the price cap set by the program, it can be challenging to find an eligible property within 50km of the city center.
To qualify for the government's housing guarantee program, here are some areas to consider picking up.
According to Domain Group, the median price of a detached home in Sydney is currently $1.6 million, up $400,000 in the last year alone.
Finding anything under $800,000 in Sydney can be a struggle, and while the districts with median detached house prices in this range are all in the west or southwest, some districts aren't that far away.
Glenfield has a median price of A$771,500 and is 31 kilometers from the city center, about 45 minutes away, while Doonside has a median price of A$761,000 and is 33 kilometers from the city center, about 40 minutes away.
In terms of apartments, the median apartment fee in Sydney is $802,255, which is closer to the price limit set by the Home Guarantee Scheme, meaning that homebuyers will have more areas to choose from if they want to buy an apartment.
The data shows that there are many areas from Sydney's Upper North Shore to the Inner West, Southside and even the city center where the median apartment price is within the scheme's cap, although they are closer to the $800,000 mark than the more distant suburbs.
While the median apartment price in both Wiley Park and Lakemba in Sydney's South West is below $400,000, first time buyers can find apartment homes within the cap in central parts of the city such as Ultimo, just 1.6km from the CBD, Leichhardt just 5.2km and Hillsdale in the East End 9.4km from the city center.
From: Australia-China First Daily News
Source: Daily Mail, The Australian, SBS Chinese