Aussie dream comes true for first home buyers
For the single mother of two, saving enough money for a deposit while paying rent was almost impossible.
But now Ms Davis and other Northern Rivers residents are jumping at the chance to use the Federal Government’s First Home Owner Grant, which was recently doubled in its $10.4 billion rescue package in response to the global economic crisis.
The $14,000 grant covered the $10,000 mortgage insurance required for Ms Davis’ $275,000 Ballina home, leaving her with a little left over towards the five per cent deposit or other costs.
In some cases, the grant money is enough to cover a five or 10 per cent deposit – giving po tential buyers the edge needed to enter the property market.
The increased grant has already led to a rise in potential first home buyers, with local agents predicting it will give the lower end of the market a hefty boost.
“The grant has definitely made a difference,” Ms Davis said.
“It is satisfying, and with interest rates coming down, it means I’ll be paying off the house at pretty much the same amount I was paying in rent, but it’s actually going to something.
“It’s really exciting.”
First home buyers can now get a $14,000 grant, with people buying a new home as their first home able to get $21,000.
Ballina-based Elders Home Loans regional manager Jason Stewart said that for many local families, recent interest rate cuts and the doubled First Home Owner Grant were the ‘double whammy’ needed to get their foot in the property market door.
He said it would primarily boost the lower end of the market in more affordable places like Casino, Alstonville and Lismore.
“Some people are still stand-offish because they are worried about what is happening with the economy,” Mr Stewart said.
“They won’t jump into a loan if they’re not 100 per cent sure they are secure in their job. But ... those who know they are right in their jobs are the ones who will be taking advantage of (the grant).”
However, Mr Stewart warned prospective home buyers not to jump into anything without giving it proper thought, warning ‘some brokers might put people into loans they can’t afford’.
George and Fuhrmann Real Estate, Casino, sales consultant Jenny Pedrini said she had seen a rise in potential first home buyers ‘looking around’ in the market.
“It is just starting to kick off now, as more people are getting to know about the increase in the grant money available,” Ms Pedrini said. “I have taken three first home buyers to look at properties just this week.”
Ms Pedrini said many sellers would also accept the grant amount as the deposit, instead of the usual 10 per cent deposit.
While in most cases buyers were still required to pay the deposit amount upfront before they get the grant, this made buying a first home more accessible, she said.
Some local real estate agencies are holding information sessions on the First Home Owner Grant. Contact your local agents for details.