We know that our local area is a great place to live, work and buy property, but what do we know about Newcastle, Lake Macquarie and Maitland’s first home buyers?
What’s happening locally with first home buyers?
Out-of-reach capital city house prices and increased uptake of remote working are just two of the reasons why first home buyers have been snapping up property in Newcastle, Lake Macquarie and Maitland.
Since the start of the pandemic, a net of 24,500 people have left Sydney for elsewhere in NSW, and Newcastle and Lake Macquarie both feature in the nationwide top 12 destinations for sea and tree changers. First home buyers are attracted to our area by more affordable homes, our enviable lifestyle and relative proximity to Sydney. The median house price in Newcastle and Lake Macquarie, while higher than ever at $746,000, is still more affordable than in Sydney, where it currently sits at $1.22 million. In Maitland, meanwhile, first home buyers are drawn by the rural lifestyle coupled with urban convenience and the fact that they can buy a freestanding home for less than $500,000.
Local land sales (like these in Cameron Park) have seen a spike in popularity with first home buyers thanks to government incentives designed to stimulate the construction industry, such as the HomeBuilder grant, the First Home Owner Grant for new homes and the New Home Guarantee.
What’s driving first home buyer activity?
This year we’ve seen an increase in first home buyers in the market, spurred on by government schemes and grants, record-low interest rates and the fear of missing out. First home buyer activity was 65.4% higher in the first five months of 2021 than it was in the same period last year. In fact, it hasn’t been this high since 2009.
Having said that, first home buyer activity has been decreasing each month since January. We’re seeing property investors who withdrew in the face of the pandemic returning to the market, and that, coupled with still-rising prices, may continue to slow down first home buyers. New lending to investors in May was at its highest since June 2015.
The average Aussie first home buyer
So, what does an average first home buyer look like?
While you might imagine them to be in their 20s, new research shows that the average Australian first home buyer, at 36 years old, is actually closer to 40. The increase in age of the average first home buyer is a reflection of the high cost of property in Australia.
Although they’re older, that’s not stopping them from taking advantage of the Bank of Mum and Dad. Recent reports show that the average parental gift or loan to adult children to help them buy property now sits at $89,000, making the nation’s parents Australia’s ninth biggest mortgage lender.
Government schemes and grants for NSW first home buyers
First home buyers around the country have been taking advantage of government stimulus to get onto the property ladder sooner. In fact, first home buyers in NSW accessing the First Home Loan Deposit Scheme or the New Home Guarantee have been able to buy a property on average 5.05 years sooner than they would have without the schemes. Here are some of the schemes and grants available to first home buyers here in NSW.
- First Home Buyers Assistance Scheme – a full or partial exemption on transfer duty (formerly known as stamp duty) for first home buyers. The price caps changed for this scheme at the beginning of August. Under the scheme, first home buyers now pay no transfer duty on homes worth less than $650,000 and a concessional rate on homes valued between $650,000 and $800,000. Land sales worth less than $350,000 are transfer duty-exempt under the scheme, with those between $350,000 and $400,000 incurring a concessional rate.
- First Home Owner Grant (new homes) – $10,000 towards buying or building your first home, provided it’s worth no more than $600,000 (buying) or $750,000 (building, including the cost of land and construction). It’s only available for brand new homes that have never been lived in and can be used in conjunction with the First Home Buyers Assistance Scheme.
- First Home Super Saver Scheme – gives first home buyers a tax break by allowing them to save for their home deposit inside their super, thus boosting savings by at least 30%.
- First Home Loan Deposit Scheme – first home buyers can buy a home with a deposit as little as 5% without having to take out lenders mortgage insurance under this scheme. The government acts as a guarantor for up to 15% of the value of the property.
- New Home Guarantee – an extension of the First Home Loan Deposit Scheme specifically for first home buyers purchasing or building a brand new home. The New Home Guarantee price cap is $950,000 for Newcastle and Lake Macquarie and $600,000 for the Hunter.
- Family Home Guarantee – similar to the First Home Loan Deposit Scheme, but for single parents. Eligible single parents can buy a home with a deposit as little as 2% with the government acting as guarantor. This scheme is not restricted to first home buyers.
Savvy first home buyers have been making the most of the locally advantageous price caps included in the First Home Loan Deposit Scheme and the Family Home Guarantee. Under the schemes, Newcastle and Lake Macquarie share the same purchase price cap as Sydney – $800,000 from 1 July 2021 – whilst enjoying a lower median property price. In the Hunter, the price cap for these schemes has risen from $450,000 to $600,000.
Are you looking to buy your first home in Newcastle, Lake Macquarie or Maitland? Get in touch with our friendly team today.