How to get free money with a first home buyers grant

Hubby and I were late starters when it came to property. We purchased our first property using a first home buyers grant in our mid-30’s, which were two very rundown cottages in country Victoria, with an elevated outlook and an ever-so-slight view of the Grampians.

The day we moved in the lawns were waist height and I remember watching my husband in a mowing and whipper-snipping frenzy of grass, twigs, leaves and dust. As I watched from the kitchen window, holding our newborn, I wondered if he’d make it back from that jungle that was our new lawn. I pictured all kinds of catastrophes mainly of the snake-bite kind and end-the-day-in-hospital kind. I was a long way from NZ, the homeland of my youth, where the only animal that could hurt you was a Weta, which might scratch you.

Eventually he returned to our equally rundown kitchen for a celebratory champers. The day was far from the elated happiness one would normally feel on receiving the keys to one’s first home. I had an impending feeling of doom that day with that gut-wrenching, deep-in-the-stomach sickness questioning ‘what have we done?’ But nonetheless, we clinked our glasses together with the perma-smile hope and jittery excitement that comes with buying one’s first home.

Like so many young investors now, we couldn’t afford to purchase in the city, so we purchased our investment property first. We simply wanted to ‘get in the game.’ We happened to be living in the regional area we planned to holiday in down the track, so that worked out well for us. We got to live in our investment property while we renovated it for the first few years. The first home buyers grant was vital in helping us achieve this goal. We still have these properties to this stay and they have also been pivotal in helping us to secure our present dream home.

That was back in 2005, but recent reports have shown a worsening situation.  Rising property prices are having a long-term impact on young investors especially in the under-30s age group.

Here’s a staggering fact according to a recent survey by iView Research:

• 18% of Australians believe they will never be able to afford to buy their own home.
• Young people are delaying or ruling out home ownership altogether

The result of this trend is that prospective young investors are getting savvy with it and coming up with creative new ways to buy their first home.

Here’s a summary of what iView’s survey unveiled

• Aussies are prepared to make cutbacks where they can
• Many are working harder to get together the deposit for a home
• Young adults are trying new strategies to enter the property market
• High property prices are forcing young Aussies to get creative
• The ‘Aussie dream’ of owning home is dwindling further

Here are some interesting first home buyer statistics based on that survey

• 24% of young buyers are finding ways to save more to purchase property
• 20% are finding ways to increase their income
• 19% would choose a property based on eligibility for a first home-owner grant
• 14% would buy jointly with friends and family
• 12% would change their expectations on size, quality or location
• 51% of respondents expect prices to rise in the next 12-24 months.
• 40% are expecting prices to remain steady
• 9% are expecting property prices to fall
• First home buyers should ignore property speculation
• Focus on what you can control – saving for a deposit.
• Focus on long-term capital growth not short-term price fluctuations

According to Tim Lawless from RP Data, first home buyers comprised just 11.8% of all owner occupier housing finance commitments and this is a record low.

The the first home buyer situation by State

The most severely affected states have been NSW, VIC, QLD and the ACT at less than 12% of all owner-occupier housing finance commitments. Trends in SA, WA and TAS have been better with the number of first home buyer housing finance commitments moving higher over the past few years. Note: There are many online resources for investigating your first home buyer options. For example, if you live in WA you could try Homestart first home owners page to get started on your homeowners journey or read more at Wikipedia.

Reasons for low interest in investing

• Housing value First Home Buyers grants generally – changes to amounts and legislation have affected home buying decisions
• First time buyers are buying an investment property and renting in an area closer to where they work and play.

Resources

Information about first home buyer grants for each state may be accessed via the links below

• ACT 
• South Australia
• NSW 
• Northern Territory
• Queensland
• Tasmania
• Victoria 
• Western Australia 

Have you had an experience with a First Home Buyers Grant in your State you’d like to share? Please send us your comments below.