{"id":11249,"date":"2017-04-06T16:30:02","date_gmt":"2017-04-06T06:30:02","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=11249"},"modified":"2017-04-06T16:30:02","modified_gmt":"2017-04-06T06:30:02","slug":"new-first-home-buyer-assistance-in-victoria","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/new-first-home-buyer-assistance-in-victoria\/","title":{"rendered":"New first home buyer assistance in Victoria"},"content":{"rendered":"<p><strong>In his column for\u00a0<a href=\"http:\/\/www.switzer.com.au\/the-experts\/john-mcgrath-property-expert\/new-first-home-buyer-assistance-in-victoria\/\" target=\"_blank\" rel=\"noopener noreferrer\">Switzer<\/a>, John McGrath\u00a0discusses the proposed changes for first home buyers\u00a0in Victoria.\u00a0<a href=\"https:\/\/i0.wp.com\/realestatetalk.com.au\/wp-content\/uploads\/2014\/08\/mcgrath.jpg\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignright size-full wp-image-1807\" alt=\"mcgrath\" src=\"https:\/\/i0.wp.com\/realestatetalk.com.au\/wp-content\/uploads\/2014\/08\/mcgrath.jpg?resize=150%2C143\" width=\"150\" height=\"143\" \/><\/a><\/strong><br \/>\nLast week I talked about the rising issue of affordability, which is particularly acute in Sydney but also a concern for Melbourne as both cities are leading the way in residential price growth.<br \/>\nThis boom is now almost five years old, which is a very long run for strong price growth and we are yet to see signs of a slowdown, mainly due to low interest rates, demand from investors and a lack of stock driving prices further north.<br \/>\nThere has been much discussion around what Federal and state governments in NSW and Victoria should do to address the issue.<br \/>\nPlenty of ideas have been put forward but the first government to actually do something is the Victorian government, with a series of measures recently announced to make home ownership easier for young people.<br \/>\n<strong>Most of these measures are still subject to approval by parliament, but here\u2019s a rundown of what they\u2019ve proposed.<\/strong><\/p>\n<ul>\n<li><strong>Abolishing stamp duty for first home buyers on properties worth $600,000 or less, with a sliding scale of concessions on properties worth between $600,001 and $750,000<\/strong>. All properties are eligible \u2013 both new and existing. These stamp duty changes will take effect from July 1 this year\u00a0<img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignright\" alt=\"economy property market grow wealth house dream first home\" src=\"https:\/\/i0.wp.com\/puassets.s3.amazonaws.com\/wp-content\/uploads\/2015\/09\/economy-property-market-grow-wealth-house-dream-first-home-300x180.jpg?resize=300%2C180\" width=\"300\" height=\"180\" \/><\/li>\n<li><strong>The existing\u00a0<strong>First Home Owner Grant (FHOG), which is available to all first home buyers who are either building or buying a brand new home valued up to $750,000, will be doubled from $10,000 to $20,000 for regional buyers<\/strong><\/strong>. It will apply to contracts signed from July 1 this year through to June 30, 2020. \u00a0Regional areas include the cities of Geelong and Ballarat. Eligible first home buyers of new properties in Melbourne will continue to receive the $10,000 FHOG<\/li>\n<li><strong>Introducing a co-ownership pilot scheme, whereby eligible first home buyers will be able to co-purchase a new or existing property with the Victorian Government<\/strong>. Called HomesVic, the scheme allows the government to purchase up to 400 homes with an equity share of no greater than 25% in each. The idea is to help young buyers who are capable of meeting loan repayments but simply can\u2019t save the full deposit they need to buy on their own due to the cost of renting. With HomesVic, buyers will need a 5% deposit and income thresholds will also apply \u2013 couples $95,000 and singles $75,000. When the properties are sold, HomesVic will receive its equity share back. The scheme will commence in January 2018<\/li>\n<li><strong>At least 10% of all properties in government-led urban renewal developments will be allocated to first-time buyers.<\/strong>\u00a0This measure will be implemented for the first time at the Arden development in Melbourne\u2019s north, which will mean about 1,500 homes will be reserved for first home buyers<\/li>\n<li><strong>Increasing land supply by re-zoning 100,000 lots across Melbourne to create 17 new suburbs<\/strong><\/li>\n<li><strong>Introducing a Vacant Residential Property Tax to encourage owners in Melbourne\u2019s inner and middle rings to make properties available for purchase or rent.<\/strong>\u00a0The Tax will be 1%, so on a $700,000 home the tax would be $7,000. There will be exemptions, for example, it won\u2019t apply to holiday homes, deceased estates, city \u2018bolt holes\u2019 used for work purposes and homes owned by Victorians temporarily living overseas. The tax will be implemented from January 1, 2018 for homes vacant for more than six months in a calendar year<\/li>\n<\/ul>\n<p>In addition to the above measures, the Victorian government will also remove incentives for investors in a bid to slow demand in that particular sector.<br \/>\nFirst home buyers typically end up bidding against investors for lower priced stock, so this should reduce competition at auction for young buyers.<br \/>\n<strong>Melbourne is a fantastic prospect for property investors with plenty of upside over the long term.\u00a0<img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignright\" alt=\"melbourne\" src=\"https:\/\/i0.wp.com\/puassets.s3-ap-southeast-2.amazonaws.com\/wp-content\/uploads\/2016\/12\/melbourne-914868_1920-300x199.jpg?resize=300%2C199\" width=\"300\" height=\"199\" \/><\/strong><br \/>\nDespite large-scale price growth over the past five years, Melbourne continues to offer much better value to investors than Sydney.<br \/>\nFor example, the median apartment price in Melbourne is $480,000 with an average 4% rental yield while in Sydney it is $685,000 and 3.7%, according to CoreLogic.<br \/>\nInvestors need to move quickly if they want to beat the deadline for changes such as the end of the off-the-plan stamp duty concession (this will remain for owner occupiers), which will see duty on a $800,000 investment apartment go from a few thousand now to more than $40,000 after July 1.<\/p>\n<h4>For first home buyers in Victoria, it\u2019s time to start your research.<\/h4>\n<p>Pick a location and the type of property you want and attend some inspections to gain market knowledge.<br \/>\nGet yourself ready to buy after July 1.\u00a0<img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignright\" alt=\"first home buyers\" src=\"https:\/\/i0.wp.com\/puassets.s3-ap-southeast-2.amazonaws.com\/wp-content\/uploads\/2014\/11\/first-home-buyer-dreaming-house-300x234.jpg?resize=300%2C234\" width=\"300\" height=\"234\" \/><br \/>\nMost importantly, don\u2019t overextend yourself just because your stamp duty will be less.<br \/>\nYou need to be able to afford your repayments over the long term when interest rates are back at their long-term averages of 7-7.5%, so do your calculations based on this, not on today\u2019s record low rates!<br \/>\nAffordability measures are expected to be announced in NSW soon, with the NSW government recently setting up a cross-government working group to brainstorm ideas for review by former Reserve Bank Governor, Glenn Stevens, before a formal plan is announced to the public.<br \/>\nOn May 9, the Federal Government is expected to include an \u2018affordability package\u2019 in the Budget to address the affordability problem on a national scale.<br \/>\nLet\u2019s hope they get it right.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In his column for\u00a0Switzer, John McGrath\u00a0discusses the proposed changes for first home buyers\u00a0in Victoria.\u00a0 Last week I talked about the rising issue of affordability, which is particularly acute in Sydney but also a concern for Melbourne as both cities are leading the way in residential&#8230;<\/p>\n","protected":false},"author":176692471,"featured_media":8963,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[13],"tags":[],"class_list":["post-11249","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-story"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - 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