Budget push to help first homeowners will boost Far North
Federal budget initiatives will help first homeowners avoid costly mortgage insurance while a regional scheme will provide a boost for those struggling to get a foot on the property ladder.
Cairns
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MORE Far Northerners may be able to get a foot in the door of home ownership with Tuesday’s budget to double the number of places offered through the New Home Guarantee scheme to 50,000 a year.
Under the scheme, eligible applicants can buy a home with a deposit of 5 per cent, or as little as 2 per cent if they are a single parent.
The federal government guarantees up to 15 per cent of the value of the loan, helping buyers avoid costly mortgage insurance.
The government has adopted Labor’s Regional Home Guarantee with 10,000 places available to first home buyers, people who have not owned a property in the past five years and are permanent residents.
Applicants must either build or purchase a newly-built home.
The schemes are price-capped at $450,000 for regional Queensland – the median price of a house in Cairns is more than $500,000, with houses selling well above asking price in a sizzling market.
But it is possible to get a house for $450,000 or less – 25 of 156 homes sold this year have had a $450,000 price tag, in suburbs including Whitfield, Earlville, Redlynch, Kanimbla and Brinsmead.
Homes on this mark are likely to be older and in need of an update and they sell very, very fast.
REIQ Cairns zone chair Tom Quaid said it could be difficult for people who had sold to get back into the market.
“It’s one thing to have bought your first place back in 1995 for $100,000 but if you sold it in 2000 for $130,000 and have been renting since, there really hasn’t been any support for you up to now,” Mr Quaid said.
“The regional cap of $450,000 is not necessarily going to get you into your dream home and if you are picky on suburb there isn’t going to be too many houses in Palm Cove or Edge Hill that fit the budget, but it will get you into a range of options, including a lot of units which most people don’t think about,” he said.
“If you were borrowing with a 5 per cent deposit at the maximum amount, then you are saving potentially $15,000 in lender mortgage insurance, which really is enough to make or break a purchase.”
He said the building component would benefit the Tablelands, where it costs less to build.
A temporary cut to fuel excise of between 10c and 20c for six months is likely and with unleaded at 211.9 cents on Monday, it’ll be a welcome, if temporary, reprieve for motorists.
Express City Courier owner Heath Stroud cautiously welcomed the move.
“I do welcome the chance to reduce costs but I am very concerned about the effect to the budget bottom line – a 10 cent cut will cost a billion a month and we have gone into so much debt battling Covid,” Mr Stroud said.
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Originally published as Budget push to help first homeowners will boost Far North
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