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Australian Homeownership Soars: Escaping Rental Struggles

Homeownership

Despite the soaring costs of living and successive interest rate hikes, homebuying intentions have climbed, as shown by the latest data. So why are so many people still chasing the great Australian dream? And what can you do to make your own dream a reality?

Despite a flurry of rate rises, new data shows home ownership is again a top priority for many Australians, with the number of house hunters increasing.

Commonwealth Bank’s Household Spending Intentions Index showed a strong 14.4% increase in homebuying intentions in May, after dropping in April. May also saw new home sales increase across Australia for the second month in a row.

So, what’s driving this appetite for property when finances are increasingly tight for many? And how can you boost your own chances of cracking the market sooner?

Rental Squeeze   

Across capital cities and major regional areas, there have been historic rental price increases and low vacancies.

Rental vacancies reached an all-time low of 1.1% in April, with the median price for renting a unit only $39 a week cheaper than renting a house. Rising overseas migration has contributed to stiff competition in the rental space too. In the March quarter, there was a 124% jump in rental enquiries year from one overseas country alone.

Understandably, many are looking to escape renting and grab their spot on the property market. But with rate hikes and inflation, saving a deposit is no easy task for many Australians.

Here are some ways to take the pressure off.

Schemes and Grants to Save Time and Money

There are many government schemes and grants designed to help you get into the market, and all can be used simultaneously, which can really bring in savings!

Through the National Housing Finance and Investment Corporation, the federal government has three low deposit, no lenders mortgage insurance (LMI) schemes available for eligible first-home buyers, regional first-home buyers and single parents.

The First Home Guarantee and Regional First Home Guarantee support eligible buyers to purchase a home with a 5% deposit. And the Family Home Guarantee assists eligible single parents to buy with a 2% deposit.

By not paying LMI, you can save anywhere between $4,000 and $35,000, depending on the property price and your deposit amount, which can fast-track your first home-buying goal by four and five years.

Another home-buying cost that can have a real sting in its tail is stamp duty.

Fortunately for first-home buyers though, state governments have stamp duty concessions available, including South Australia, which announced that it was scraping the tax for first home-buyers on new homes valued up to $650,000.

Meanwhile, Victoria, New South Wales, Queensland, Western Australia, Tasmania, the ACT, and the Northern Territory also offer stamp duty concessions. If eligible, this can either eliminate or reduce the cost of stamp duty.

Most state governments also offer first homeowner grants to help you get the keys to your own home.

Victoria, New South Wales, Queensland, Western Australia, Tasmania, Northern Territory and South Australia all offer first homeowner grants. If eligible, you could receive a grant of between $10,000 and $30,000 depending on your state and other eligible criteria.

Frequently Asked Questions

Why is homeownership soaring despite the rising costs of living?

Despite the increasing costs of living and interest rate hikes, the number of people looking to buy homes has risen. The article suggests that the desire to escape the struggles of renting and the availability of government schemes and grants are driving this trend.

What challenges are renters facing that make them consider buying a home?

Renters are experiencing historic rental price increases and low vacancies in capital cities and major regional areas. These challenges are pushing many to consider buying their own homes.

How can government schemes and grants help potential homebuyers?

Government schemes and grants can significantly help potential homebuyers by saving them time and money. For example, not paying LMI (Lender’s Mortgage Insurance) can save between $4,000 and $35,000, depending on the property price and deposit amount. This can fast-track the home-buying process by four to five years.

What is the role of stamp duty in the home-buying process?

Stamp duty is another cost that potential homebuyers need to consider. However, state governments offer stamp duty concessions for first-home buyers, which can make the process more affordable.

How can Zippy Financial help me in the home-buying process?

Zippy Financial can help you understand your borrowing power, loan options, and eligibility for various schemes and grants. They can guide you through the entire process, making it easier for you to buy your dream home.

Give Us a Call

It is important to note that spots for some of these schemes are limited. And they are popular, so it’s best to get in quick. 

If you’d like to kick renting to the curb, get in touch with us today. We will help you work out your borrowing power, and your loan options, and factor in what schemes you may be eligible for.

Phone: 1300 855 022

Email: clientservices@zippyfinancial.com.au

Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business. 

About the Author:   

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.   

Connect with Louisa on Linkedin.   

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).

Disclaimer:This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial. 

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SERVICE LOCATIONS

Buying a rental property is a popular way to invest, but where do you stand if the property you are interested in already has a tenant? 

2023 may provide promise with double-digital percentage gains for rental returns predicated in 11 out of the 14 major Australian residential markets, but what happens if the property you want to buy already has tenants? 

Depending on your plans, this could be a major positive… with tenants in place, the rental income can roll in from day dot. But if you want to make changes to the property or the tenancy agreement, things can get more complex. 

Here are the Ins and Outs of Buying an Investment Property with Tenants 

Know your tenants

When you are buying an occupied property, it is wise to learn about the tenants. If the rental history shows that you have stellar tenants, that is great. You can have rent coming in straight asway, all without the need to advertise or go through applicants. But id the rental history is a grim read, you can’t just switch tenants on a whim. 

As the landlord, you are obligated to honour the existing lease. There is state and territory government legislation that you will need to adhere to as an owner, with certain processes and procedures to follow if you want to go down the road of ending a tenancy. 

What is the condition of the property?

Be thorough in investigating the condition of the property and ask if there are any outstanding maintenance requests. This can help to avoids any unexpected costs. The owner is responsible for most repairs, so you need to ensure the property is maintained in a timely fashion as per the tenancy agreement. 

If there is a list of things to be fixed, you will want to budget for it. 

What if you want to make changes?

You are obligated to hour the term of the existing lease, which means if you want to make changes to the tenancy agreement (like increasing the rent), you will need to wait. 

If you want to make non-routine renovations to the property during the lease period, you will need to negotiate with the tenants. Extensive renovations could affect their enjoyment of the property, which may mean the reject the request to carry out works and you will have to wait until the lease expires. 

The only way you can make changes while the lease is in place is if there is a mutual agreement with the tenants. 

Property management

A good property manager will fill you in on your obligations and maintain the smooth running of the tenancy. If you like the way things have been handles, you can choose to stick with the existing manager. But if you want to change, you can. You will most likely have to provide a notice period to the property manager, and the duration depends on the state or territory the property is located in. 

Alternatively, you can decide to manage the tenancy yourself, just be sure you are across all the legislation. Property management can be a demanding job, so make sure you know what you are getting yourself into before taking it on!

Get in touch

Are you ready to jump into property investment? Get in touch today! We can help you navigate the process by finding suitable loans, unlocking existing equity and working out your borrowing power. 

Phone: 1300 855 022
Email: clientservices@zippyfinancial.com.au


Zippy Financial is an award-winning mortgage brokerage specialising in home loansproperty investmentcommercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business. 

About the Author:   

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.   

Connect with Louisa on Linkedin.   

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).    

Disclaimer:This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.  

Comparison Rate calculated on a secured loan amount of $150,000 for a term of 25 years. WARNING: This Comparison Rate is true only for the example given and may not include all fees and charges. Different terms, fees and other loan amounts might result in a different Comparison Rate. Fees and Charges Apply. Terms and Conditions are available on request.