How first homebuyers can get a foot on the property ladder

You don’t have to be a Rhodes Scholar to work out that Canberra’s gangbuster property market may be making first homebuyers more than a little nervous when it comes to realising the great Australian dream of homeownership.

Despite a slight decline in real estate values in May, Canberra is still Australia’s second most expensive property market behind Sydney. There’s been almost three years of consistent growth – including 19% in the past year and a median house price now stands at more than $1 million.

So how do first-timers get a foot on the property ladder?

Mortgage broker and Director at ACT Finance Solutions, Fiona Milligan, said first homebuyers should not be disillusioned by the current real property market and a new home was still within reach despite apparent hurdles.

If saving enough for a deposit feels like an uphill slog, Fiona suggests one of the best and quickest ways to improve your chances of a foray into property was through the ‘Bank of Mum and Dad’.

“To fast track an entry into the property market, it is possible to leverage equity in a parent’s property via a family support loan,” she said.

“This can be a good way to go as it allows first home buyers to enter the market quicker, as no savings is required and means you will avoid expensive lenders mortgage insurance.”

There are also a range of financial incentives and concessions that can help first homebuyers into the market sooner rather than later, she said.

The ACT Revenue Office offers the Home Buyer Concession Scheme which, since July 1, 2019, has meant more buyers pay no or reduced duty.

Under the scheme, no duty is payable on a home purchase if the total gross income of all buyers is less than the income thresholds here.

There are other conditions like the purchasers must not have owned property in the last two years and at least one of the buyers must live in the home continuously for a year after completion.

Buyers must also be aged at least 18; and all properties – vacant land, established and new – are eligible, in any location in the ACT. There are no price restraints.

Fiona said it was also worth considering accelerated savings through the Federal Government’s First Home Super Saver Scheme.

“The First Home Super Saver scheme allows first homebuyers to save faster with the concessional tax treatment of superannuation by making additional super contributions which can be used as their future home deposit,” she said.

“Up to $30,000 for singles or $60,000 for couples can be withdrawn from this super scheme.”