With property prices dropping across the country, record low interest rates on mortgages, and the promise of government-led mortgage insurance discounts by both sides of the house prior to the recent Federal election, it is the perfect time for First Home Buyers to enter the market.

Each State has its own scheme for stamp duty discounts and exemptions, which lower the cost of purchasing. IF (and of course, with an election week promise it’s a VERY big IF) the government-backed guarantee scheme goes ahead, it will lower the cost of borrowing. What this means is that it will be easier for first home buyers to enter the market.

To my mind, what it WON’T mean is rising property prices, because what fuelled the unprecedented growth in property prices in the last cycle was easy access to credit. That has been curtailed by banks in response to regulatory pressure and whilst they seem to have gone too far the other way and are now unnecessarily restricting credit, time will tell what effect that has.

The concession will not increase first home buyers’ borrowing capacity, so it won’t fuel price growth. Hopefully, it allows more Australians to purchase their first homes!

If you’d like to get an idea of how your borrowing capacity stacks up, and what the landscape looks for you as a first home buyer, please get in touch and we can start a conversation!