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Average First Home Buyer Needs $120K Deposit

Finder’s latest figures show that only a few first home buyers plan to put down a 20% deposit.

By Kanebridge News
Tue, Jun 14, 2022Grey Clock 2 min

The average deposit needed to enter the property market has reached a record $120,000 according to analysis by comparison site Finder,

Finder’s senior editor of money Sarah Megginsons was shocked when the figure reached such lofty heights.

 “Many first-time buyers can’t afford the hefty deposits,” Ms Megginson said.

“Australia has recently been through a house price boom and the increased deposit requirement as a result is making it much harder to crack into the market,” she said.

“Getting on the property ladder is becoming out of reach for many with affordability deteriorating.”

According to the latest Australian Bureau of Statistics lending data, Finder put the average loan size for the first-home buyers at $479,610 in April — almost $33,000 higher than a year earlier and more than $40,000 higher than two years ago.

However, Ms Megginson has the latest figure at about $120,000 for a 20% deposit on the average $600,000 first-home buyer property.

While the deposit amount has reached a new peak, the price falls predicted by the likes of CBA and other major banks, should come as good news to those looking to get into the market.

Despite this, with the RBA adjusting for interest rates to fight soaring inflation, affordability remains an ongoing issue.

Higher rates will increase repayments and reduce borrowing capacities, which Ms Megginson noted means people won’t be able to borrow as much.

“The actual amount first-home buyers can borrow is going to fall, as well as the fact that repayments are going to increase,” she said.

The ABS data showed the number of new owner-occupier loans to first-home buyers fell by 4.4% in April, to be 34.3% lower than a year earlier. However, it remained 4.2% higher than pre-pandemic levels in February 2020.

The Finder survey found 75% of first-time buyers paid or are planning to pay less than a 20% deposit.

That included 14% who planned to or did pay just 5% upfront.

Only 16% of those surveyed had or planned to put down a 20% deposit, while another 9% expected to have more than 20%.

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30 metres of water frontage across a 1733sqm block.

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Fri, Jun 24, 2022 < 1 min

With views up the coastline to the NSW central coast comes this magnificent double oceanfront block — a rare setting for the ultimate family holiday retreat.

Boasting level lawns that spill down to 30-metre of ocean frontage, the 1733sqm plot plays host to a three-level 5-bedroom, 4-bathroom, 2-car garage home in one of Whale Beach’s most tightly held cul-de-sacs.

A contemporary masterclass in style, the home showcases free-flowing spaces with glass-wrapped interiors in a layout that accommodates family and friends.

Within the main living spaces comes a state-of-the-art kitchen with Calacatta marble and stainless-steel benchtops accompanied by a full suite of Gaggenau appliances and a separate walk-in cool room.

Other living zones found on the ground level include a games room and sun-drenched terrace with its own Miele appointed kitchen.

Outside sees a 15-metre resort style pool to soak up the sun and watery views, while the poolside studio is fully self-contained and perfect for extra weekend guests.

Accommodation is comprised of three luxurious ensuite bedrooms — of which several open directly to the terraces. The master bedroom has access to the home office, large walk-in-robe and cellar or store room.

Further luxurious additions to the home include a gym, jacuzzi, pizza oven, BBQ and Ecosmart fireplace.

The listing is with LJ Hooker Palm Beach’s David Edwards 0415 440 044 with the POA. palmbeach.ljhooker.com.au

It comes as falling volumes and declining prices reflected a weakness likely to continue in the established homes market.

By Kanebridge News
Wed, Jun 22, 2022 < 1 min

The nation’s housing sales fell by $8 billion in the three months to March when compared to the previous quarter according to data provider CoreLogic’s quarterly Pain & Gain report.

It comes as falling volumes and declining prices reflected a weakness likely to continue in the established homes market.

The fall in nominal profits from $38 billion in December echoed the decline in loss-making sales to $261 million from $355 million. Declines in housing values only kicked in after the March quarter, with the extent of loss-making sales predicted to increase.

CoreLogic’s analysis of 106,000 establish home sales in the March quarter showed the proportion of profit-making sales fell to 92.7% from the December quarter’s 94% peak figure.

The March quarter saw the first time profitable housing sales fell in a year and a half — unit profitability declining faster than houses.

The pandemic was the last cause of such a decline, in the three months to August 2020.

The major markets of Sydney and Melbourne are the cities most at risk due to higher interest rates, and therefore made the biggest contribution to loss-making sales over the quarter — the rate of unprofitable sales in both cities rising to 4.8%.

 Hobart was the city with the highest proportion of profit-making sales for the 15th straight quarter. Just 1 per cent of the Tasmanian capital’s sales made a loss in the March quarter, down from 1.6 per cent in December. 

Further the report fleshes out the different pace of growth between houses and apartments that has made units more affordable into the March quarter. Between the onset of Covid-19 in March 20202 and this year’s March quarter, combined capital city house values rose 25.8% compared to units at 10.6%.

As part of the NSW government’s budget, changes have been made to the tax.

By Kanebridge News
Tue, Jun 21, 2022 2 min

NSW first home buyers will be given the choice to pay stamp duty or an annual land tax under a major reform by the Perrottet government in a test to move away from transfer duties.

In Dominic Perrottet’s first budget as the NSW premier, he has proposed an overhaul of property and housing taxes.

Under the new $730 million property tax plan — that sits at the core of the NSW Budget — first home buyers will have the option of paying the upfront cost of stamp duty, or an annual property tax payment of $400 plus 0.3% of the land value of the property. It will be available on homes valued at less than $1.5 million.

Ahead of the budget, Mr Perrottet said the initiative is aimed at aiding first-home buyers get into the market.

“We want to lower the barriers to owning a home for first home buyers seeking a place of their own,” Mr Perrottet said. “In the past two decades, the share of first home buyers under 35 years of age has declined from 67 per cent to 61 per cent.”

The scheme put forward by the Liberal state government is the second of its kind in the country, with the ACT halfway through a 20-year transition away from stamp duty. There, once a buyer accepts the land tax option it is permanently removed from the stamp duty system.

The NSW model will differ from the ACT scheme in that homes can revert to stamp duty once they are sold to a new owner.

Legislation for the new plan will be introduced into parliament in the second half of the yar, with eligible first home buyers to apply to opt into the program from January 16 in 2023. Any home buyers who purchase in between the laws being passed and the program coming into effect will be able to have their stamp duty payments refunded.