first home buyers

What first home buyers can do amid low housing affordability

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How has the cost of housing shifted in capital cities by suburbs in the last five years? What does it mean for first home buyers?

It appears that there has been a decline in the number of suburbs with a $400,000 (and below) median value and an increase in suburbs with a $1 million (and above) value.

The decline in affordable housing and rise in expensive housing were seen in Sydney, Melbourne and a more moderate level in other capital cities such as Brisbane, Adelaide, Perth, Hobart, Darwin and Canberra.

Five years ago, about 21% of Sydney suburbs had a $1 million (and above) median house value.

This year, it has about 55% of suburbs while only 8.7% of suburbs had a $600,000 (and below) median value. Most of these were located more than 50 KM from the Central Business District.

In 2012, only 9.5% of suburbs in Melbourne had a $1 million (and above) median house value but today, it had increased to about 32% of suburbs.

Meanwhile, about 24% of Melbourne suburbs had a median house value of below $400,000 in 2012 but it has dropped to 2.7% of suburbs this year.

The supply of affordable housing for first home buyers has dropped in the last five years as well. The drop in lower priced houses is prevalent in Sydney and to a lesser degree in Melbourne.

The drop in mortgage rates in the last five years has made mortgage debt service easier, eating up less of the household income. Household income hasn’t increased much but Sydney and Melbourne dwelling values have significantly increased.

Because of rising prices, home owners have experienced a wealth boost but wages for those in Sydney and Melbourne have not kept up with house value growth, resulting to a decline in lower priced housing supply. It has been difficult for first home buyers to save enough money to deposit and enter the Sydney and Melbourne housing markets.

What can first home buyers do?

Whether you are a beginner, seasoned investor or business owner, we can give you guidance to maximise the financial areas of your life. We can give you an integrated and tailored solution of your superannuation, taxation, property investment, asset protection, estate planning and more.

If you want to purchase your first home, there are some facts you have to know. If you are purchasing or building a new dwelling valued up to $750,000, you may be eligible for a FHOG. You can get up to $20,000 with the First Home Owner Grant.

You may also have to pay land transfer duty or stamp duty, which depends on the property value but you may be eligible for exemptions and concessions from stamp duty as well, depending where you are buying a property.

If you would like to know more about how you can enter the property market, you can click here to know more about Chan & Naylor services. You can leave your details here and we can schedule you for a free consultation. We’ll contact you to explain more.

Click here to schedule a chat or call us on 1300 250 122

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Chan & Naylor Group has nationwide offices in Brisbane and Capalaba in Queensland, Melbourne and Moonee Ponds in Victoria, East Perth in Western Australia, and South West Sydney, Parramatta, Pymble, North Sydney, and Sydney in New South Wales.

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