Property ownership holds a special place in Australian culture, but according to Perron King, director at Herron Todd White, that dream is becoming increasingly elusive due to ongoing affordability constraints and a significant lack of housing supply.
The path to property ownership in Australia remains steep as first-time buyers face rising property prices and a tight market, according to Herron Todd White.
Known as the “Australian Dream,” property ownership holds a special place in Australian culture, but according to Perron King (pictured above), director at Herron Todd White, that dream is becoming increasingly elusive due to ongoing affordability constraints and a significant lack of housing supply.
To support first-home buyers, federal and state governments have rolled out a variety of incentives.
Federally, the Home Guarantee Scheme has been a game-changer, with one in three first-time buyers participating in 2024. The scheme includes the First Home Guarantee (FHG), Regional First Homebuyer Guarantee, and Family Home Guarantee.
Under the FHG, buyers can purchase a home with as little as a 5% deposit without the burden of mortgage insurance, with Housing Australia securing up to 15% of the loan. This allows eligible buyers to access various types of properties, from existing homes to house-and-land packages and off-the-plan apartments, with 35,000 places available in the scheme.
Despite these incentives, rising property prices continue to challenge buyers.
While Melbourne recorded a slight annual price drop of 1% as of August 2024, other cities surged ahead.
Brisbane, Adelaide, and Perth saw significant increases in property values, growing 19.6%, 19.4%, and a staggering 30.1%, respectively.
Sydney remains particularly unaffordable, consistently ranking as one of the world’s least affordable cities.
The latest Demographia report placed Sydney second globally, with a 13.3 median multiple, meaning the median house price is 13.3 times the median household income.
According to the Commonwealth Bank (CBA), the national average home loan size for first-home buyers is now approximately $498,000.
First-time buyers in metro areas average around $530,000 per loan, compared to $403,000 for those in regional areas. Though regionally based buyers may borrow less, they typically have a higher loan-to-value ratio, averaging 86%, compared to 82% in cities.
Despite the hurdles, opportunities exist across Australia’s property market.
This month, Herron Todd White’s analysis covers key property opportunities in capital cities, regional centers, and smaller towns, highlighting strategies first-time buyers are using to navigate the market and secure their piece of the Australian Dream.
For many, these strategies involve leveraging government support, exploring affordable regional options, and carefully considering timing and location to maximise value in this challenging housing market.
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