First home loan deposits have risen to more than $100,000 – up 16 per cent since January 2019, according to figures from the Australian Bureau of Statistics.

It would take more than a decade for first home buyers to save up to $106,743 and pay the 20 per cent deposit needed to buy a residential property on the back of a supercharged property market.

First home buyers’ deposit rose the highest in Canberra – up 24 per cent since 2019 to reach $117,790 for a $471,161 home loan. First home buyers’ deposits in New South Wales recorded the next highest at 23 per cent during the same period with deposits now at $128,469 to secure a home loan of $513,876.

The price of a median Aussie home has also been rising at its fastest rate in 31 years.

However, there are incentives to help first time buyers enter the property market, particularly with the Government’s First Home Loan Deposit Scheme which only requires a 5 per cent deposit.

This means for a property worth $600,000, you only need to save $30,000 which is far more achievable than a six-figure sum to help younger buyers get into the property market.

This scheme has been possible by the National Housing Finance and Investment Corporation (NHFIC) which guarantees a participating lender up to 15% of the value of the property purchased by an eligible first home buyer. Community First Credit Union is currently one of the lenders participating in the Scheme.

The First Home Loan Deposit Scheme allows first homebuyers to purchase their first home with only a 5 per cent deposit and avoid paying the Lenders’ Mortgage Insurance (LMI),  which is levied if a borrower needs a loan that is more than 80 per cent of the home’s value. The insurance covers the lender in case of a mortgage default. The LMI can add thousands of dollars to the cost of a home loan.

First home buyers Shelly Wiltshire and Jonathan Harvey bought their first home at St Marks Point in Lake Macquarie, NSW for $605,000 late last year. The three-bedroom house, in original condition, also has a granny flat with kitchenette.

“It’s been our goal for five years. We have been actively trying to buy for the last 12 months and this property is the perfect fit. It has a sunroom perfect for our parrot Frankie and a bigger living area out the back. We are over the moon,” Shelly says.

When the property held its first open house in late November last year, John saw the property on a Saturday, Shelly inspected it on Tuesday, they made an offer on Friday and it was theirs by Monday.

The couple also took advantage of the stamp duty break available to first time buyers.

Currently, first home buyers in NSW do not pay stamp duty on homes valued up to $650,000. If the home is valued between $650,000 and $800,000, a concessional rate applies.

Shelly, a 31-year-old dental hygienist has been banking with Community First since she opened her first savings account as a young girl. She grew up in Swansea and her parents live down the road.

Community First is now offering single parents another government scheme which allows house purchase with just a two per cent deposit.

Find out more

If you’re a first home buyer and would like to know more about the Family Home Guarantee or other financial supports available to you, talk to Community First today on 1300 13 22 77.

The information contained in this article is only correct at the point of time of publication. It is general information and has been prepared without taking into account your personal circumstances, objectives or needs. Please consider if this information is right for you before making a decision to acquire any product.  Community First Credit Union Limited ABN 80 087 649 938 AFSL/Australian credit licence 231204

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