Australian property: Why couple have just 31 days to buy home

Emily and Jarred are in a race against time to secure a home before to save themselves almost $100,000, but they are facing stiff competition.

Sydney couple Emily and Jarred Lawson have just 31 days to buy their first home and make more than $100,000 in savings.

They are planning to take advantage of new spots opening up in the government’s First Home Loan Deposit Scheme on July 1, which allows people to buy with a 5 per cent deposit, along with the NSW Stamp Duty Exemptions that ends on July 31.

The husband and wife, who currently live in the inner west suburb of Marrickville, had planned to buy in five years.

But after saving $32,000 in the past 18 months by making big sacrifices, they saw an opportunity to get into the market by using both schemes.

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Emily and Jarred Lawson have just 31 days to buy a property to take advantage of two schemes to help first home buyers. Picture: Supplied

The couple have been looking for a two bedroom apartment for around $650,000, which would mean instead of the usual 20 per cent deposit, they save around $97,5000 under the scheme as they only need $32,500.

But they face immense pressure to snap something up before the end of July and ideally want to avoid an auction situation.

“We found a couple of places in the Canterbury and Hurlstone Park area, but we have been told by our broker we are not allowed to do anything until July 1, so it’s a waiting game,” Emily told news.com.au.

“I think for us we have seen things at auction go for way above what we can put down, so we are trying to avoid auctions. Part of the problem with the First Home Loan Deposit Scheme is when the government released the last 10,000 spots they were giving them out and then found people were not using them, so there were cracks in system.

“Our broker is finding it hard to get pre approval meaning if we put an offer in and then we are applying for a mortgage through a bank — there’s an extra layer of work we have to do. “Another couple may offer the same amount and have pre-approval, so they have less processes to got through, that’s another reason to avoid auction as they would likely go with them.”

The stamp duty exemption was introduced last year for first home buyers spending up to $650,000 on a property and Emily described it as “big deal”.

“That’s an extra $20,000 to $30,000 on top of your deposit, which we unfortunately don’t have. Stamp duty can be that big barrier to home ownership and the fact that is being wiped for the time being is a drawcard,” she explained.

“There is slight pressure as it ends at the end of July, so we literally have 31 days to get into the market as a couple as any contract dated after 31 July would not qualify for the exemption, so we have this tight window to get everything done.”

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The stamp duty alone will save the Sydney couple between $20,000 and $30,000. Picture: Supplied

While the 23-year-old is excited about becoming a home owner, she said the fierce competition makes the search “disheartening”, particularly compared to what her parent’s generation could buy.

“My parents first home was a beautiful five bedroom house they purchased at 25 in the Sutherland Shire and that’s the most disheartening thing as you want to grow up with what you had and that’s not a possibility ever in the immediate future,” she said.

July could be the hottest market for property yet, according to director of buyers agency Aus Property Professionals, Lloyd Edge, particularly as the First Home Loan Deposit Scheme rolls out again across the country and brings even more people into the market.

“Conceptually it’s good as there are more opportunities there for first home buyers and it’s not so much bad news, but it’s not going to be as easy if you only have 5 per cent deposit saved as its becomes more competitive and there are still a shortage of listings,” he said.

“Markets are still going to be strong and prices will still increase and it’s still going to be hard to get into when it comes to capital for price points under the scheme – as under $750,000 in Sydney certainly can’t get someone into a house.”

Australian buyers agent Lloyd Edge has a number of recommendations to help people find a home. Picture: Supplied

For those looking to buy in July, Mr Edge has a number of recommendations. First up, do your research and get a real understanding of the suburbs you want to buy in.

“Because sales prices and auction guide prices generally have nothing to do with what property will sell for, so have an understanding of what properties sold for in recent weeks to make sure it’s within your budget,” he said.

Making sure you’re part of the inner circle of real estate agents to snap up properties off market or as soon as they hit is also helpful, he added, while it’s also important to have pre approval for the mortgage.

Mr Edge said he had seen some unorthodox ways to buy a property recently, including people cashing in their cryptocurrency for a deposit, as well as others door knocking and asking the owner if they would be willing to sell even if the property isn’t on the market.