Frasers Property brazen move to get FHBs on 5 percent deposits
Frasers Property says it is a move that will be welcome relief to many first home buyers.
But halving the traditional 10 percent deposit required to secure a new home appears instead a rather risky, ill-timed offer for FHBs.
FHBs can buy into the red-hot Sydney market for just a 5 percent deposit - and be in hefty debt residence by September!
The offer is for two of its projects, Centrale in North Ryde (pictured above) and Tailor’s Walk in Botany at just 5 percent deposit.
"We expect it will prove very popular,” Nigel Edgar, general manager – residential NSW, Frasers Property Australia says.
The offer will run to June 30.
To ensure it benefits local first home buyers, the reduced deposit is not open to foreign investors and applies to properties worth up to $900,000.
No gimmick it appears, as Nigel Edgar avows the initiative was "a responsible way of helping eligible first home buyers to get a foot in the market."
We all know saving for a traditional deposit is a tough process.
And many say a 10 percent deposit really isn't enough these days – and aiming for 20 percent is wise.
Especially this year as banks are more risk averse and less inclined to accept a borrower without a genuine savings track record.
But Edgar says he understands how hard it can be for young people to save the standard 10 percent deposit for their first home while paying rent and living costs.
Edgar says of course it’s imperative that people stay within their financial boundaries, "which is why a pre-approved loan from a reputable financial institution is one of the key terms and conditions of this initiative."
But will responsible banks really want to lend on 5 percent? And why now in the property cycle?
Edgar says first home buyers have a wide variety of apartments to choose from at Centrale and Tailor’s Walk, with flexibility surrounding move-in dates.
"Some eligible first home buyers will have the option of moving into their brand new Tailor’s Walk home as early as September this year, or can secure an apartment to move into late 2018.
“We have made the initiative available at Centrale and Tailor’s Walk because they have the widest variety of apartments priced to qualify for the $10,000 NSW First Home Owner Grant.
"It gives first home buyers the opportunity to stop paying rent and move into a new home soon or, alternatively, the choice to wait a bit longer and focus on saving,” Mr Edgar says.
Centrale is a new community integrated with the North Ryde train station. Located one train stop from Chatswood and 13km from Sydney CBD, Centrale will comprise four residential buildings with 380 apartments in a mix of one, two and three bedroom configurations when complete. One-bedroom apartments are priced from $595,000 to $745,000, while two-bedroom, two-bathroom apartments with a car space range from $870,000 to $970,000.
At Tailor’s Walk in Botany, one-bedroom apartments range from $600,000 to $745,000 while two-bedroom designs are priced from $775,000 to $990,000 – making the community a particularly appealing option for first home buyers.
Spanning 3.1 hectares, Tailor’s Walk is a unique community creatively weaved into the increasingly popular Botany area. It will have five apartment buildings ranging from six to eight storeys, offering a diverse range of one, two and three-bedroom single level and loft style apartments.