No more First Home Buyer Grant – what’s been the impact on the market?
In the 2018-2019 budget, Chief Minister Andrew Barr announced some big changes to the Canberra property market: the end of stamp duty for first home buyers and the termination of the First Home Owner Grant. This has had a significant impact on the market, with more first home owners out and about at exhibitions for established properties.
Two significant changes came into effect.
1. The end of the First Home Owner Grant:
This was a grant of $7,000 only available to first home buyers purchasing a new or substantially renovated home in the ACT. It was great if you were buying off the plan, but not much help if you were looking for an older place.
The FHOG has been scrapped to help fund the second change.
2. The abolition of stamp duty for first home buyers regardless of whether you are purchasing a new or old home:
First home buyers with a household income under $160,000 will be exempt from stamp duty, regardless of whether they are buying a new or older home. Previously the exception only applied to first home buyers purchasing a new build in the ACT. There is no threshold for the maximum amount of stamp duty saved as the concessions apply to old property sold.
What’s been the impact on buyers?
While getting rid of the FHOG has had a negative impact on some, It’s had a very positive impact on others.
Samara and Elliott have just started to look for a property, attending their first open homes last weekend.
“We’re looking for something with a yard, three bedrooms and a lock up garage. Elliott spends his weekends woodworking as a hobby so needs some space to do that and we have a dog that needs to run around.”
“The FHOG was never going to help us, because the only ‘new’ properties that we could afford were apartments, which don’t fit our lifestyle. Now we can get an old house or townhouse and still get some support from the government.”
What’s been the impact on the market?
Jonny Warren, sales agent with Independent Inner North, has seen massive changes in the market since July.
“There’s been a lot more activity. The marketing is just going crazy. First home buyers are eating up property at the moment. I just sold a house in Forde that’s only been on the marketing for four days. We had 45 offers today alone, 39 of which were first home buyers. First home buyers are also spending a lot more than they were six months ago.”
“When I talk to them, they all tell me that they’ve just been waiting for it to happen. But the sudden influx of more buyers into the market isn’t going to be a single spike, we’re going to keep seeing this increase in activity for another 12 months.
“It’s a great thing for the Canberra market, and it’s got everyone excited.”
When asked what advice he would give first home buyers wanting an established property to move into to, his words were short. “Buy now. Don’t wait. Simple as that.”
How should a First Home Buyer get started?
The first thing a prospective buyer needs to do is get their financing sorted. With the market heating up, if you find a property you love, you need to jump on it. Which is easier to do when you have your finance pre-approved.
At Independent, we recommend consulting a mortgage broker, as they can assess your financial situation and give you access to more loan options than any bank can.
Then it’s about doing your research and contacting agents. When there are so many buyers in the market, some properties get sold before they’re even advertised, so get in touch with one of our local teams and let them know what you’re looking for.
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