The latest data coming from CoreLogic shows that national home values fell two months in a row by 0.4% in May and 0.7% in June. Home lending growth is also showing signs of slowing down.
The federal government’s $688 million HomeBuilder program announced last June should stop the fall in new home sales and is expected to stimulate the property market activity. The First Home Loan Deposit Scheme in which 10,000 places have been given out last 1st of January is again releasing another 10,000 places.
The two stimuli are designed to breathe life into the residential property market, which is facing a prolonged downturn because of the COVID-19 crisis.
10,000 more opportunities to help Australians buy their first home sooner
Ten thousand places under the Australian Government’s First Home Loan Deposit Scheme are now available for the 2020-21 financial year. Under the Scheme, eligible first home buyers can purchase a modest home with a deposit of as little as five per cent.
Through the National Housing Finance and Investment Corporation (NHFIC), the Australian Government guarantees up to 15% of the assessed property value to a participating lender.
There’s been a widespread appeal of the Scheme across all states and territories, including regional and metro areas, according to NHFIC CEO Nathan Dal Bon. Despite the current challenges posed by COVID-19, Dal Bon anticipates that there will be continued demand for these new 10,000 places.
First home buyers can check their eligibility and apply for one of the 10,000 Scheme places for the 2020-21 financial year through a panel of 27 participating lenders.
Applications from 1 July requires a 2019-20 Notice of Assessment from the Australian Taxation Office to demonstrate that their taxable income is no more than $125,000 for individuals and $200,000 for couples.
Good news if you are wanting to build a new home or renovate an existing one! The Australian government has just announced a HomeBuilder scheme that will provide eligible owner-occupiers (including first home buyers) with a tax-free grant of $25,000.
To access this grant, owner-occupiers need to meet the following criteria:
• You are a natural person (not a company or trust);
• You are aged 18 years or older;
• You are an Australian citizen;
• Your building contract is entered into between 4 June 2020 and 31 December 2020
• You build a home as a principle place of residence where the house and land value does not exceed $750,000 OR you substantially renovate your existing principle place of residence and the renovation contract is between $150,000 and $750,000 and the value of your existing property does not exceed $1.5million
• Construction commences within three months of the contract date
• You meet one of the following two income caps:
– $125,000 p.a. for an individual based on your 2018-19 tax return or later
– $200,000 p.a. for a couple based on both 2018-19 tax returns or later
The government estimates that approximately 27,000 grants would be handed out as part of the package across $10 billion in building projects, supporting 140,000 direct jobs and another 1,000,000 related jobs in the residential construction sector. To find out more, visit the Australian Government website.
This article is for general information only and should not be considered personal financial advice. Before making a financial decision, you should seek independent advice from a mortgage broker, financial planner or an accountant.
Feature image: Pxfuel