50,000 low-deposit spots open for first home buyers and single parents

The new financial year has kicked off with a bang for first home buyers! A whopping 45,000 more places have opened up for them under the Home Guarantee Scheme, as well as 5,000 more spots for single parents. Here’s how it could help you buy a home sooner.

Home ownership has long been the great Australian dream, but high property prices are making it tough to save a 20% deposit for many young families.

That’s where the federal government’s Home Guarantee Scheme (HGS) comes in.

It gives first home buyers a leg up into the property market even if they have just a 5% deposit, and it’s proving to be very popular.

In fact, it’s helped more than 160,000 Australians buy or build their own home since the scheme launched four years ago.

Places in the HGS are capped each year, but the good news is that an extra 50,000 spots have just been announced for the 2024-25 financial year.

Not sure what the scheme is about?

Let’s take a closer look at what’s involved by answering a few FAQs.

What is the Home Guarantee Scheme?

The HGS helps first home buyers and single parents buy a place of their own even when they have a small deposit.

Essentially, the government acts as a guarantor for the home buyer’s loan, so there is no need to pay lenders mortgage insurance, which can be a big saving on upfront costs.

In fact, not paying LMI can save buyers anywhere between $4,000 and $35,000, depending on the property price and deposit amount.

Who does the scheme help?

The HGS covers three separate programs, each with a different type of home buyer in mind.

The First Home Guarantee helps eligible first home buyers get into the market with as little as a 5% deposit. From 1 July 2024, an extra 35,000 places became available.

The Regional First Home Buyer Guarantee is dedicated to helping first home buyers who live in regional areas buy a home with just a 5% deposit. An extra 10,000 places have opened up for the 2024-25 financial year.

The Family Home Guarantee supports eligible single parents to buy a home with as little as a 2% deposit. This will help up to 5,000 families this financial year.

Am I eligible for the Home Guarantee Scheme?

You’ll need to tick a few boxes to be eligible for the HGS.

In particular, there are limits around the maximum purchase price for a home under the scheme. The upper limits vary between cities and across regional areas from state to state, and are adjusted each financial year.

One way to find out if you’re eligible is to call us and we can walk you through the various requirements.

Do all banks support the Home Guarantee Scheme?

No. Lenders choose to be part of the HGS, and while there is a reasonably wide choice of banks to pick from, not all lenders have signed up.

The Real Estate Institute of Australia says the “best way to see if you can qualify for the scheme and seek pre-approval is to speak with a mortgage broker”.

To date, mortgage brokers have secured up to 80% of the HGS placements, and we can guide you through the application process, answer any questions you may have about buying a first home, and recommend a home loan option suited to your needs from the lenders that are part of the scheme.

Call us today to find out more about buying with a 5% deposit – and zero lenders mortgage insurance. You could be in your own home a lot sooner than you expected!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Will home prices keep rising over the next year?

Property prices are expected to keep climbing higher through to mid-2025 – though not everywhere, according to a new report. We reveal where prices are tipped to go up, and where prices are expected to fall.

What a crazy financial year it’s been for property prices.

Despite a cost of living crunch and high interest rates, home values Australia-wide have soared 8.3% over the past 12 months, according to CoreLogic.

Will prices keep heading north? Or can we expect the market to cool at some stage?

These are key questions for home buyers who may be weighing up whether now is the right time to buy.

To get some answers, we turned to Domain’s latest forecast report, which sets out expected property price movements over the next 12 months.

The big picture: prices set to keep rising

According to Domain, several factors are set to push Australian home prices higher over the next year.

On one hand, we’re seeing a tight supply of new homes being built, combined with lower than usual numbers of homes listed for sale.

On the other side of the ledger, strong buyer demand is being fuelled by a growth in migration.

As Domain puts it, the “push-pull between affordability and availability” will be the factor that shapes Australia’s property market between now and June 2025.

Price growth is expected to differ between cities

That’s not to say home prices across Australia will move in the same direction and at the same pace.

Let’s take a quick tour around the nation to see what Domain believes lies in store for home buyers (and apologies to Hobart and Darwin residents – neither city was covered in the released report).

Brisbane

Brisbane’s property market has notched up an impressive 16.3% price growth over the past year. And Domain says there’s more growth to come.

With a forecast for 6-8% price growth, Brisbane’s median house price could hit a record high of up to $998,500 by mid-2025. Apartment values are expected to increase by 4-6%.

Sydney

If Domain’s prediction of 6-8% price growth proves accurate, Sydney’s median house price will hit a new record high of up to $1.76 million by this time next year.

Apartment prices (median) are also expected to reach a new record of up to $855,000 based on forecast price growth of 4-6%.

Melbourne

Melbourne’s housing market is expected to remain a little cooler, with growth between 0-2% expected – leaving median house prices between $1.03 million and $1.05 million. Unit prices are expected to do better, potentially rising by up to 4%.

Regional Victoria is the only market where Domain expects house prices to cool, with falls of 0-3% expected by mid-2025.

Adelaide

Adelaide could be on track to become a million-dollar city if Domain’s forecast of 7-8% price growth pans out. It could see Adelaide’s median house price hit a record high of up to $984,000 by June 2025.

Unit prices are anticipated to grow by up to 6%, helping the city’s median apartment price push through the $500,000 barrier.

Perth

There’s no denying Perth has had a bumper year, with a 22% jump in home prices over the past 12 months. And according to Domain there’s plenty of gas left in the tank.

With price growth of 8-10% possible over the year ahead, Perth could notch up a record-high median house price of between $840,000 and $856,000 by this time next year. In the unit market, prices are expected to jump 4-5%.

Canberra

Canberrans can expect mild house price growth, with values forecast to climb by up to 4%.

Unit prices in the nation’s capital are expected to increase by 1-4%.

What to weigh up

Domain’s forecasts are just that – predictions, not facts.

Along with factors that could push prices higher, the property listing site also cautions that a tighter jobs market and stagnating incomes could put downward pressure on prices.

Long story short: the right time to buy is when you feel ready to get into the market.

We can’t say for sure how property prices will move.

But we can provide clear answers on your borrowing power, help you understand if you’re in a position to land home approval, and help you find a home loan that’s right for your needs.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Rate cuts? Pencil them in for 2025

Put the party pies on ice and postpone those rate-cut celebrations for a while yet. The much-touted rate cuts we’ve been waiting for may not arrive until 2025. Here’s why rates could be staying higher for longer, and how to take action yourself.

June saw the Reserve Bank of Australia (RBA) keep the cash rate on ice – yet again.

Rates haven’t budged since November last year, and with the RBA not due to make another rate call until August, interest rates will remain in a holding pattern for at least two more months.

For home owners struggling to manage their home loan at current interest rates, it begs the question: ‘what happened to all the talk about rate cuts in 2024?’

Here’s what’s happening.

One reason why rates aren’t moving

Just a few months ago, some of our biggest banks were predicting interest rates would start to slide sooner rather than later.

The Commonwealth Bank and Westpac, for instance, expected rate cuts as early as September.

That’s now looking increasingly unlikely.

The reason lies with inflation.

The RBA is intent on getting inflation down to 2-3%.

Unfortunately, inflation is not playing along.

It’s currently sitting at 3.6%. So close, but not quite there.

When are rates likely to fall?

The RBA expects it could be “some time yet” before inflation is happily nestled in that 2-3% range – the point at which long-awaited rate cuts may start to kick in.

It’s not much of a date for home owners to work towards, though the big banks have a few time frames of their own.

Westpac and NAB now both see rates heading south from December. And while CommBank recently stated it expected rates to fall in November, there are signs it’s losing hope for a 2024 rate cut.

“Given the challenging underlying inflation backdrop, as well as a labour market that is loosening more gradually than expected, the runway is shortening between now and November,” CBA’s head of Australian economics, Gareth Aird, said.

“The risk to our call is increasingly moving towards a later day for an easing cycle.”

Meanwhile, ANZ doesn’t expect a rate cut before 2025. Ditto Citi economists and a growing number of other experts.

Long story short, even if we do get a December 2024 RBA rate cut, it’s probably fair to say we won’t see those cuts flow through to home loans until early next year.

And a note of caution: the RBA mentioned in its June statement that it is “not ruling anything in or out”.

It’s a grim reminder that a rate cut is not guaranteed before another rate hike.

This is why it’s so important to take action of your own.

How to manage higher rates

Revisiting your household budget, identifying areas where you can cut back, and tucking spare cash into an offset account to save on loan interest are all steps worth considering.

And don’t forget, tax cuts for 13.6 million Australians kick in from 1 July.

That could provide extra cash each pay day to help pay off your home loan.

It’s also a good idea to speak to us for a home loan review.

We can let you know if you still have the loan that’s right for your needs, or if you could save by switching – without having to wait for RBA rate cuts.

Better still, rising national property values may mean you could be in a great position to refinance.

Talk to us today for more tips on managing your home loan repayments and possibly trimming your loan rate. It may mean the party pies can come out sooner!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Is a tree or sea change on your horizon?

Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

The classic tune ‘Home among the gum trees’ is fast becoming a lifestyle anthem for a growing number of Aussies.

A surging number of city-slickers are heading to the bush or bay, new Commonwealth Bank research shows.

In fact, metro to regional relocations are now 20% higher than pre-Covid.

It goes to show that regional towns and cities have a lot going for them.

So what’s the appeal?

Along with a laidback lifestyle and the chance to see Skippy on your way to work, rather than countless sets of traffic lights, a key drawcard of regional living is more affordable housing.

Where are people moving?

The Sunshine Coast in South East Queensland is currently the nation’s most popular destination for Australian movers, securing a 16% share of net internal migration over the past 12 months.

Other popular areas outside our nation’s capital cities include the Gold Coast, Wollongong, Newcastle, Lake Macquarie, Moorabool, Geelong, the Alexandrina region, the Fraser Coast and Launceston.

Western Australia is also becoming an increasingly attractive destination with Busselton, Capel, Greater Geraldton, Northam and Albany all making their way onto various hotspot lists this quarter.

Regional home values vs city prices

Across Australia’s capital cities, the median home value is about $864,780, according to CoreLogic.

By comparison, the median value across regional markets is $626,888.

That’s a whopping $237,892 difference.

The price gap can be far bigger depending on where you’re moving from and moving to.

In Sydney, for instance, the median house value is $1,441,957. Head to regional NSW, and you could pay closer to $760,000 for a house – a saving of around $680,000!

Regional living can help cut loan repayments

Buying a more affordable home can have other flow-on benefits, such as a lower stamp duty bill.

It can also have a huge impact on home loan repayments.

For example, let’s use the above figures and pretend you’re deciding between purchasing an $864,780 capital city home and a $626,888 regional area home.

To keep things simple, let’s say you’ve saved up $173,000 for a 20% deposit on the $864,780 home – and you’ve also got extra money set aside to cover any stamp duty expenses or other fees (the exact amount would vary state to state).

Let’s also assume a home loan rate of 6.4%, which the Reserve Bank of Australia says is about the current average principal and interest variable rate, and a 30-year loan term.

On this basis, the initial mortgage for the city home would be about $692,000 and the monthly mortgage repayments on the city home would come to around $4,329 each each month.

For the regional property, your initial mortgage would be about $454,000 (assuming you put the full $173,000 towards the deposit) with monthly repayments in the order of $2,840.

That’s a monthly saving of $1,489 by moving to a regional area – extra money to spend on your home, yourself or your lifestyle.

What about capital growth?

No one can say with certainty how property values will perform in the future.

What we can do however is look at how house prices have performed across regional areas in recent years.

CoreLogic says values in regional areas have jumped 51.1% ($212,000) nationally since March 2020, compared to an average of 31.5% ($207,000) across our state capitals.

So in terms of dollar values, the capital gains across both markets have been fairly similar in recent years.

Ready for your home among the gum trees?

Okay, regional living isn’t for everyone.

Even for committed fans, moving from a capital city to a regional area calls for careful planning and research.

But if you’re hankering for a home with a more manageable mortgage, give us a call today to discuss loan options that could help you get that tree or sea change happening sooner.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Why three-in-four Aussies turn to a broker for home loan help

You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Borrowers are more spoilt for choice than ever before when it comes to home loans.

But who has time to sort through over 100 lenders in the market to pick out a loan that’s suited to your needs?

Your mortgage broker does.

But for the big end of town, increased competition can mean lower profit margins (and unhappy shareholders!).

That doesn’t mean brokers are at war with any particular bank though, as a few articles stated in the Australian Financial Review over recent weeks (here’s a great non-paywalled response).

As Mortgage and Finance Association of Australia (MFAA) CEO Anja Pannek succinctly put it: “Positioning banks as competing with brokers is like saying Hilton hotels is competing with travel agents, instead of Hyatt and Sofitel. It completely misrepresents how the mortgage broking industry works”.

What brokers do is streamline the home loan process. It’s just one of the reasons why mortgage brokers are the go-to choice for 74.1% of home buyers (and that figure has been steadily increasing!).

But our role isn’t just about helping you find a competitively-priced home loan with the features you may need.

We go much further.

Here are three other ways you can benefit from the support of a mortgage broker.

We work in your best interest

Behind the friendly face of your mortgage broker is a serious legal obligation.

We are bound by a Best Interests Duty.

It means we are required by law to always put your best interests first, providing home loan options that are based on your unique needs.

That matters because if a loan isn’t the right choice for you, it may not save you money in the long run, no matter how low the rate is.

Banks are not bound by the best interests duty.

Brokers can help guide the way

Buying a home is possibly the biggest purchase you’ll ever make.

It’s also something you’ll probably only do a handful of times over your life. But this is something we help people through every day.

We can act as a trusted guide to help you navigate the complex process of buying a home with confidence.

We can also help you assess your borrowing capacity, so you can buy with confidence, and we can explain where you can consider making shifts in your budget to become home loan-ready sooner.

And because we’re focused on making things more straightforward for you, we take the jargon out of home buying – we can help you get your head around complex issues like lenders’ mortgage insurance, or how to prepare if you’re buying at auction.

It’s all about mentoring our customers at every stage of their property journey.

We’re here for the long term

You and your home loan are likely to be together for a while. And we’ll be right there with you.

Our regular home loan reviews provide reassurance that your loan continues to be the right option for you, even as your life changes and evolves.

And when you’re ready to kick new goals – from renovating, to buying your next home, investing in a rental property, or simply refinancing – we’ll be ready to help guide you through the process.

Like to know more about how we can help? Call us today and discover why three out of every four Australian families come to a broker first.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.