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First home buyers may be missing out due to a lack of awareness of government assistance available to them, Resolve Finance has found.
With the new financial year having started, several federal and state governments have been updating their first home buyer incentives and grants.
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Last week, for example, 50,000 new places opened up to home buyers looking to access a mortgage with a smaller deposit under the three Home Guarantee Schemes: the First Home Guarantee, the Regional First Home Buyer Guarantee, and the Family Home Guarantee.
Meanwhile, South Australia made headlines recently by becoming the first state to completely abolish stamp duty for first home buyers.
And, over in Western Australia, the Cook government has increased the stamp duty exemption to houses worth up to $450,000 (previously $430,000) and lifted the concession threshold from $530,000 to $600,000, while the Queensland government has raised the threshold ceiling for the concession on transfer duty from $500,000 to $700,000 with reduced stamp duty for properties up to $800,000.
However, national mortgage brokerage brand Resolve Finance has found that many future home buyers are unaware of the government assistance available to them or not sure how to use them.
This is particularly concerning as it may leave some first home buyers feeling as if they cannot afford to buy property, the brokerage said.
According to the Resolve Finance Generation Rent Report, 42 per cent of renters are working towards buying their first home, with those aged 25–34 leading the charge (68 per cent).
Those renting in Sydney (46 per cent) and Melbourne (45 per cent) were found to be most likely to be saving for their first home, with renters in Brisbane (38 per cent), Adelaide (37 per cent), and Perth (42 per cent) being least likely.
However, the rising cost of property has made many first-time buyers compromise on what they wish to buy. Nearly two-thirds (63 per cent) said they would consider buying a smaller home in a more desirable area in order to enter the property ladder, 46 per cent said they would be willing to move further away from their place of work or education, while 35 per cent would give up on amenities such as backyards and garages.
The managing director of Resolve Finance, Don Crellin, added that many borrowers may be delaying their first home purchase as they feel they have no alternatives.
He said that only 39 per cent of those planning to buy a home over the next two years intend to make use of government assistance schemes.
Borrowing from family (17 per cent) and cashing in other investments (14 per cent) were cited as alternative avenues considered by some to raise money for a deposit, while 5 per cent of renters (and particularly those in the ACT) said they would instead buy an investment property as their first step onto the property ladder.
As such, he said brokers were well positioned to help borrowers understand what support is available to them.
“Awareness of government grants and incentives is crucial for first-time buyers, yet our research shows a concerning gap in this knowledge,” Crellin said.
“A good broker will make buyers aware of these schemes but there’s potential for home owners to miss out on valuable support simply because they are unaware it exists.
“In today’s challenging housing market, it’s essential for prospective buyers to think creatively about their path to home ownership.
“Whether it’s exploring government schemes, considering low-deposit options, or even pooling resources with friends and family, there are various avenues to explore.”
He urged borrowers to “reach out to a broker to discuss these options and craft a strategy tailored to your unique circumstances to overcome barriers and turn a dream of home ownership into a reality”.
[Related: 50k places open for Home Guarantee Schemes]
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