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Clock ticking for first-home buyers turning to government incentives

By RWDANDENONG
The clock is ticking for first-home buyers to get on the property ladder with the help of government incentives, with a raft of support measures to expire in the coming months as property prices soar to new heights.

Slow lending approvals, strong buyer competition and rapidly rising prices mean first-home buyers need to act sooner rather than later to take advantage of some stimulus measures set to end, experts say.

HomeBuilder and additional building bonuses in some states and territories – which enabled first-home buyers to access up to $55,000 in cash grants — have already ended, with more coronavirus support measures, as well as other policies, scheduled to end by mid-year.

In Victoria, first-home buyers are flocking to the market to take advantage of a temporary stamp duty waiver on homes worth up to $1 million, said Melbourne buyer’s agent Cate Bakos, president of the Real Estate Buyers Agents Association of Australia.

Buyers can access a 50 per cent duty discount on new homes and a 25 per cent discount for existing homes until June 30, after which first-home buyers can access existing exemptions and concession for homes worth up to $60,000 and $750,000 respectively.

A $20,000 grant for first-home buyers building or buying a new home in regional Victoria, in place since 2017, is also scheduled to end on June 30.

Ms Bakos said there had been strong demand from first-home buyers looking to spend just under $1 million, which could secure them a two or three-bedroom house.

“You really need to be making the move if you think you want to buy with the waiver … you’ve got three months, and for anyone out there searching for a home and facing the reality of heightened competition, you need to allow at least six weeks to find [a home].”

First-home buyer numbers had been climbing since late last year, but there are early signs of a slowdown – with owner-occupier first-home buyer loan commitments down slightly in February, on ABS data, the first fall in nine months. While first-home buyer volumes remain high, the return of investors is also picking up speed.

Ms Bakos warned buyers keen to qualify for the waiver not to get carried away when competing for eligible homes, as they may only save less than $14,000 in duty. Strong competition for eligible properties had seen buyers overpay by tens of thousands of dollars when they would have been better off buying above the $1 million threshold.

Source : Domain.com.au

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