First Home Buyers’ Boost in NSW
In 2024, first home buyers in New South Wales have a significant advantage with no stamp duty for properties up to $800,000 in urban areas. Let’s break down the income and deposit requirements for this scenario:
Single Buyer
- Income needed: $145,000
- No deposit required with family guarantee security
Couple
- Combined income needed: $155,000 ($90,000 + $65,000)
- No deposit required with family guarantee security
With 5% Deposit
- Deposit amount: $40,000 (can be gifted)
- Income requirement reduced by approximately $10,000
Rent where it’s fun to live. Buy where it’s affordable and use rental income to help pay the mortgage.
Minimum Deposit Options
Did you know you can start with as little as 2.2% deposit? This amounts to just $17,600 for an $800,000 property1.
Changing Property Market Dynamics
Property values have increased significantly in recent years, making it challenging for new buyers to purchase in the same suburbs where they grew up1. This has led to a shift in buying strategies, particularly among younger generations.
Rise of Rent-Vesting
Many 20 and 30-year-olds are now opting to stay at home and buy an investment property first, a strategy known as “rent-vesting”78. This approach allows them to enter the property market while maintaining their preferred lifestyle.
Example of Rent-Vesting
- Property value: $800,000
- Income required: $100,000 (assuming 5% rental return)
- Deposit needed: 10% ($80,000)
Advice for Aspiring Homeowners
Don’t give up on your property ownership dreams. Once you enter the property market, you can benefit from capital growth8. Consider alternative strategies like rent-vesting if traditional homeownership seems out of reach in your desired area.
Current Market Trends
The average deposit for first-home buyers has nearly doubled over the past 12 years, from $48,990 in 2012 to $97,330 in 20241. This significant increase highlights the growing challenges faced by new entrants to the property market.
Despite these hurdles, government initiatives like the First Home Guarantee Scheme are helping eligible buyers enter the market with as little as 5% deposit3. Additionally, the rise of rent-vesting and co-ownership arrangements demonstrates the creative approaches young Australians are taking to achieve property ownership8.
Remember, while the path to homeownership may look different than it did for previous generations, there are still opportunities available for those willing to explore alternative strategies and remain persistent in their goals.
Note – To confirm your lending options see an experienced mortgage broker for full terms and conditions lenders need to qualify.
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