How will the price difference between capital cities and regions impact the new FHB policy?

How will the price difference between capital cities and regions impact the new FHB policy?
How will the price difference between capital cities and regions impact the new FHB policy?

There were 2300 first home buyers (FHBs) in March across NSW.

The average NSW FHB spends about $465,000 on their purchase, based on the commonly expected 20% deposit and ABS data showing a typical $387,000 NSW mortgage.

There is a lower $359,000 average mortgage in Victoria and $300,000 in Queensland.

The typical Australian first home buyer $342,000 mortgage is around 25% lower than the $462,000 non-first time owner occupier buyer's mortgage.

The ABS data also highlights the price gap between capital cities and the regions.

Sydney established detached house prices sit at around a $900,000 median, with houses in the rest of the state coming in at $466,000.

It is $700,000 for Sydney attached dwellings (terraces, semi and units) with the rest of NSW having a $405,000 median attached dwelling purchase price.

The gap is narrow in Queensland with established detached houses costing $530,000 in Brisbane against $430,000 in the rest of Queensland.

In Victoria, established Melbourne homes cost $705,000 slightly more than double the $350,000 in the rest of the state.

Prime Minister Scott Morrison's proposed deposit guarantee scheme will seek to pioneer a differential recognition of prices across the nation in deciding what priced homes will qualify.

It will have an as yet to be determined different cap on home purchases eligible for the scheme which will underwrite the topping up of buyers with just a 5% deposit who find lenders prepared to lend to them.

The current grants fully fund purchases up to $650,000, petering out on an $800,000 purchase.

The new scheme is likely to attract buyers to think about hiding to the regions and also into Apartments in the city.

Urban Taskforce CEO Chris Johnson noted the average apartment in Sydney is likely going to be $400,000 cheaper than the average house.

"So many younger people, including families will see the benefits of a new type of living where they share large gardens, share swimming pools that they don’t have to maintain and often have child care centres next door.”

During March, first home buyers enjoyed the largest share in the Northern Territory, with 42% of owner occupier housing loans.

This was followed by Western Australia (36%), Victoria (30%) and Queensland (27%). 

FHB participation was lowest in Tasmania (20%), followed by South Australia (21%), the ACT (22%) and New South Wales (24%).

With more than 500 first home buyers over the past year, the 2170 Liverpool postcode retains its status as NSW's biggest beneficiary of government grants.

Over 11,000 Liverpool buyers have secured grants to get themselves onto the property ladder since the FHOG's commencement in 2000, introduced in the wake of the goods and services tax.

The outer ring south western buyers have secured $11.7 million in grants and concessions over the past year, and $213 million in the past 19 years.

The median Liverpool house price currently sits at $740,000, with its median unit price $440,000.

Westmead and Campbelltown follow as next busiest FHB hotspots.

First Home Buyers Regional

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