For those who want to know more before commenting:
https://www.finder.com.au/first-home...deposit-scheme
What are your thoughts on this scheme? Do you think it will potentially drive prices up, or do you think it's such a small number of people that it will have little to no impact?
DH and I are planning to buy our first home next year - we *may* be able to take advantage of this scheme, however it would be reliant on us finding the right house at the right time - we want to choose carefully.
The cap where we live is 700K, which is more than we planned to borrow anyway.
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08-11-2019 07:55 #1
Thoughts on the government's 5% housing deposit scheme?
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08-11-2019 08:03 #2
I think more could be done to help first home buyers. Rather than trying to get them to save, they should look at other things instead. Like good rental records. I think the ability to pay rent on time for a number of years is more important than saving for a deposit.
I suppose it’s a good thing in a way, and with first home buyers not paying stamp duty in NSW it’s a good incentive, but I think they need to work out how to give priority to the first home buyer rather than investors or it will push prices up.
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LoveMyWay (08-11-2019),Rachel3072 (08-11-2019)
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08-11-2019 08:05 #3
Considering the fact that you still need to actually get approved through a standard lender, and it's only available to the first 10000 first homme owners that will owner occupiers, I don't think it's going to make much difference in the actual housing market. I suspect it will make more of a difference in local communities where fist home owners that qualify won't be AS stretched in the first few years.
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08-11-2019 08:07 #4
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08-11-2019 08:16 #5
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Izy (09-11-2019)
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08-11-2019 08:33 #6
Thoughts on the government's 5% housing deposit scheme?
I don’t know to be honest. Overall I don’t think this program will affect the market, it will help 10,000 people/couples. In the bigger picture, housing affordability is a big problem. Irresponsible lending / borrowing has caused all sorts of issues and should not be encouraged either. It’s a tough issue to tackle and I don’t know what the magic solution is, I suspect there isn’t one. Part of the issue is that there isn’t one housing market. Cities on the east coast have seen huge or at least stable growth so people who borrowed with low deposits there are fine. Other cities (Perth, Darwin) have had big crashes. People who borrowed with small deposits in, for example Darwin and Perth, are now in a world of pain as they can’t refinance as they owe more than their houses are worth or in the very least would need to pay LMI again so they can’t take advantage of the low interests at the moment. They are stuck paying 5% interest and if they sell they are left with a personal loan for the difference. This is the type of situation people should not be encouraged to get into.
But then how can people who can’t save deposit ever get a house? The interest rates are so low and cost of living so high, it becomes an almost impossible feat to save enough for a 20% deposit.
For numerous reasons I think stamp duty should be canned for all purchases (or at least all purchases of PPRs). The ACT are doing this.
Also it’s not just first home buyers that are struggling. People trying to renter the market are often in just as dire situations.Last edited by babyno1onboard; 08-11-2019 at 08:38.
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Mod-Wise Enough (08-11-2019)
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08-11-2019 09:30 #7
two things that stand out is it’s limited to 10,000 borrowers. why? not sure how that is supposed to help anyone but a very tiny segment of first home buyers. the income cap is an issue. $100k these days is a pretty average salary, it should be open to all first home buyers.
the lmi is a joke, we avoided it because my parents went guarantor for our home loan (we’ve since removed them following a valuation of the house) but we only had a 5% deposit. it’s bloody hard these days to get a decent chunk of money behind you, even on a good salary.
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08-11-2019 09:50 #8
I can’t believe it’s limited to only 10,000 people, that hardly seems like a scheme to me.
Anything to avoid a LMI is good as that’s a killer but I don’t think this is all that’s needed to be done in such a hard market to get into.
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08-11-2019 09:51 #9
I've just accepted that LMI is a reality for us unfortunately (unless the stars align and we can take up on the scheme). 20% deposit is an unrealistic joke of an amount to expect people to save in a lot of areas of Australia. We'd waste another 5 years paying rent to try and save up 20%. I'm ready to start paying off something that can be ours, and if that means only having 5% deposit then I'm jumping on it.
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08-11-2019 09:56 #10
Thoughts on the government's 5% housing deposit scheme?
exactly. we saved hard for ages just to scratch together 5%. and being older, we wanted to have kids after we got married. had we waited to buy first then have kids, i don’t know when we would get to buy or how old we’d be by the time we could finally afford to have kids as going down to one salary and me going back and only doing part time hours would’ve added years to the savings effort. not to mention daycare costs draining savings. i’m so grateful we were fortunate enough to have my parents go guarantor for us as it enabled us to buy with the deposit we had and in the area we wanted. if we were buying in our area now, we couldn’t afford it or we’d be mortgaged to the back teeth.
20% is $100k plus in most capital cities, that’s a lot to try and save up, esp once you’ve had kids and have the associated costs of living, kids daycare costs plus trying to save.
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