Why First-Home Buyer Schemes Are Becoming a Stealth Investment Strategy
First-home incentives can still form part of a long-term investment plan if used strategically.
3 min
Australia’s home prices continue to grow, and while that makes them great investments, they are also some of the most unaffordable in the world.
That’s why first-home buyer schemes such as the First Home Owner Grant, the First Home Guarantee, and stamp duty concessions have become so valuable.
These programs are designed to reduce upfront costs and fast-track people into homeownership.
But the question many aspiring investors are now asking is can these schemes be used as part of an investment strategy? These government initiatives aren’t designed for investors, but they can still play a key role in your long-term investment journey if used strategically.
What the schemes actually allow
Every first-home buyer incentive in Australia is created to support owner-occupiers, not investors.
Whether it’s a cash grant, reduced deposit requirement, or a stamp duty discount, the catch is always the same in that you must live in the property for a set period of time. For example, the First Home Owner Grant often requires you to live in the property for at least six to twelve months, depending on the state.
The First Home Guarantee allows you to purchase with just a 5 per cent deposit without paying lenders’ mortgage insurance, but again, you’re required to live in the property for at least one year.
Likewise, state-based stamp duty concessions are only available for properties intended as a principal place of residence. If your intention from the outset is to buy a property solely for rental income, you won’t be eligible. However, if you’re open to living in the property initially, then transitioning it into an investment, there’s a path forward.
A strategy that works
Rentvesting has emerged as one of the most practical ways for first-time buyers to take advantage of these schemes while also laying the groundwork for a property portfolio.
The concept is simply, buying a property in an area you can afford (using the first-home buyer schemes to assist), live in it for the minimum required period, and then rent it out after fulfilling the occupancy condition.
This approach lets you legally access the benefits of first-home buyer schemes while building equity and entering the market sooner. Instead of waiting years to save a full 20 per cent deposit for an investment property, or getting priced out altogether, you get your foot in the door with reduced upfront costs.
Once you’ve satisfied the live-in requirement, the property can become an income-generating asset and even serve as collateral for your next purchase.
What to look for in a rentvestment property
If you plan to eventually convert the property into an investment, you need to think beyond your short-term living experience. It’s essential to buy a property that performs well both as a home and as a long-term asset.
That means looking at key fundamentals like location, rental demand, and growth potential. Suburbs with strong infrastructure, access to employment hubs, good transport links, and low vacancy rates should be high on your list.
A balanced price-to-rent ratio will help ensure manageable holding costs once the property transitions to an investment.
Established low-density areas often outperform high-rise apartment developments that flood the market with supply and limit capital growth. And ideally, your property should offer scope for future improvements, whether that’s a cosmetic renovation, granny flat addition, or potential to subdivide down the track.
Mistakes to avoid
There are a few common missteps that can undermine this strategy. The first is selling too soon. Some grants and stamp duty concessions include clawback provisions if you offload the property within a short period, which could see you lose the benefits or even owe money back.
It’s also a mistake to let the lure of a government handout sway your purchasing decision. A $10,000 grant doesn’t justify compromising on location, growth prospects, or property fundamentals.
Another pitfall is failing to consider the financial impact once the property becomes an investment. Repayments, tax treatment, and outgoings may change, so it’s important to stress-test your position from day one.
Lastly, beware of buying into oversupplied areas simply because they’re marketed to first-home buyers. Not all new builds are good investments. If hundreds of identical properties are being built nearby, your long-term growth could be seriously limited.
With the right approach, your first home can be the foundation for an entire property portfolio. It starts with using available government support to lower your entry cost.
From there, you occupy the property for the required time, convert it to an investment, and leverage the equity and rental income to fund your next purchase.
Many of the most successful investors today began with a single, strategically chosen property purchased using these exact schemes. By buying well, you can turn your first home into the launchpad for long-term wealth.
Abdullah Nouh is the Founder of Mecca Property Group (MPG), a buyers’ advisory firm specialising in investment opportunities in residential and commercial real estate. In recent years, his team has acquired over $300 million worth of assets for 250+ clients across Australia.
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The Gold Coast prestige property market has ignited ahead of summer, but this time the heat isn’t coming from the beachfront. Instead, high-end buyers — both local and interstate — are turning their attention inland, where sprawling acreages and riverfront estates are redefining luxury living.
The latest headline-grabbing sale is Rivers Bend in Carrara (pictured), which has changed hands for a record $26 million — the highest price achieved along Main River this year and the second-largest riverfront sale in Gold Coast history.
Set on 6,300 sqm, the estate offers a masterclass in design and amenities. The primary residence features five bedrooms, including a master suite with a Nero Marquina marble ensuite and a 1.2-tonne freestanding bath. A gym, theatre room, 700-bottle temperature-controlled wine cellar, and garaging for 12 vehicles add to the home’s appeal.
Outdoors, the riverside entertaining terrace features a commercial-grade bar and kitchen. In contrast, the 18m saltwater pool — complete with spa, swim-up bar, firepit and TV — overlooks a championship-sized tennis court and rooftop pavilion. A self-contained two-bedroom guesthouse, complete with its own pool and spa, rounds out the estate.
The sale of Rivers Bend follows that of Redwood, the Currumbin Valley acreage that was quietly sold for $28 million earlier this year. The 2.88-hectare estate, last purchased for $2.55 million in 2017, was transformed by vendor Bridget Deer, wife of Ignite Travel founder Randall Deer.
The only other sale this year to break through the $20 million threshold was a Hamptons-style riverfront home in Southport, selling for $22 million.
Designed by Bayden Goddard, the four-level, 1,805sqm residence on Macmillan Court showcases century-old red ironbark flooring, Carrara marble, and chandeliers sourced from New York and Paris.
Among its highlights are five ensuite bedrooms, a chef’s kitchen with a cold room and three ovens, a 3,000-bottle wine cellar, an Aspen-inspired games den, and a six-bar basement.
The top floor is dedicated to leisure, featuring a gym, steam room, and a rooftop bar that accommodates up to 50 guests, complemented by open-plan living spaces that flow seamlessly into a north-facing saltwater pool and spa.
The newest addition to the trophy market is The Estate in Tallai, listed by former AFL player turned tech entrepreneur Brad Moran and marketed by Kollosche. Carved into the mountainside of its 8,888 sqm site, the ultra-luxury residence makes a statement from arrival, with a circular driveway of 75,000 hand-laid cobblestones and a five-element fountain finished in 24-carat gold mosaics.
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Outside, a “private fun park” includes a 160m go-kart track, putting green, basketball court, and 20m gold-tiled infinity pool.
Three self-contained “Sky Residences” cater for guests. At the same time, a glass-fronted garage gallery with space for nine cars — plus a race simulator and executive office — cements The Estate as one of the Gold Coast’s most spectacular offerings.
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