First-time buyers have 90 days to find a home under loan deposit guarantee scheme
THE clock is ticking for first-home buyers who have scored a spot in the Federal Government’s loan deposit scheme to find a house.
Hopeful buyers have 90 days to sign contracts to purchase a property before their place in the scheme lapses.
But thousands have rushed to the scheme, designed to help them get into the market sooner, with the 3000 spots available in January filled in just over a week.
For hopeful buyers like Geelong resident Jacob Grams, the focus is now on finding the right house for he and his wife.
While saving for a deposit for more than 12 months, they’ve been searching for a house in 2019, in one case missing out to an investor where they made the highest offer, but the underbidder stumped up a bigger deposit.
They have been searching established houses in suburbs like Newcomb and Bell Park, looking carefully for any structural issues to avoid any surprises after they purchase.
ON THE MARKET: TOP 10 GEELONG SUBURBS $300K-$499
|Suburb||Median house price||Listings $300K-499K|
“I guess we’re looking for something that’s finished or recently updated that we can move in to straight away without having to do too much work on,” Mr Grams said.
“Having the access to this deposit scheme means we might be able to go into a house now that needs a little bit of work,” he said.
“But we’re not keen on renovating. My wife said we don’t want to move into a construction site.”
ON THE MARKET: TOP 10 GEELONG SUBURBS $500K-$699
|Suburb||Median house price||Listings $500K-$699K|
Mr Grams a lot of homes in the range of about $500,000 had been well kept or updated.
“The suburbs we are looking at are like Bell Park. There seems to be some good quality homes and it’s definitely not as busy as Grovedale or Belmont, which seems to get a flood of people at every inspection.”
Ray White, Lara agent Terry Cleary said first-home buyers tended to go for houses ready to move in, rather than renovators.
He said there was a rush of sales at the end of 2019.
“They’re typically looking for something that is neat and tidy. A good solid start, that doesn’t need too much work done to it,” he said.
“They want to concentrate on paying off the mortgage and not worry about renovating.
“I think there wouldn’t be too many people who went into a renovation and stuck to their budget.”
Geelong first-home buyers in scheme can spend up to $600,000.
Suburbs including Armstrong Creek, Bell Park Herne Hill, Hamlyn Heights, Lara, Leopold, Belmont, Newcomb and Corio have a median house price beneath that.
The scheme allows borrowers to secure a home loan with just a five per cent deposit and the government will act as a guarantor for the remaining 15 per cent.
This means borrowers don’t have to pay the expensive lenders’ mortgage insurance — a charge that protects the lender if the borrower defaults on the loan.
The rest of the 10,000 places in the scheme will become available from February 1, when 25 non-major lenders can start offering the guaranteed loans.
The Minister for Housing and Assistant Treasurer Michael Sukkar said it was “great to see such the strong interest” in the scheme but “it is important to remember this is only the beginning”.
Mr Sukkar said the majority of applicants had been single buyers with a median income of $68,900.
— with Sophie Elsworth