I was recently at a function where I was talking with old work colleagues. We were all lamenting the ‘if only’. If only we’d bought that terrace house (in Newtown in 1991 for $198,000) or that unit with water views (in Mosman in 1996 for $300,000). The reason that we didn’t buy those properties is not dissimilar to what I hear today – that it seemed so expensive. And that’s the thing. It always seems expensive! Especially when you are young and even more so if you are thinking of buying on your own.
What does history tell us? If I look at my friends who did buy property in 1996 they are miles ahead of those of us who went off travelling the world and arrived home in our late 20’s with no assets or savings, but plenty of life experiences. That’s not to say that they didn’t get to do those things, many of them did, but when they went they had an appreciating asset in their name, generating an income which often more than covered the holding costs.
If you use the benefit of hind sight to plan, then you might just give yourself a better chance of saving what these days seems like an enormous deposit. The trick might be to get started as soon as possible.
First Home Saver Super Scheme
In the 2017/18 budget the federal government announced a number of measures aimed at improving housing affordability. One of these measures is called the First Home Saver Super Scheme which will allow people saving for their first home to save a deposit within super and benefit from the concessional tax treatment that super receives. Whilst the idea has merit, it sounds complex and it will be interesting to see if the opportunity it offers is taken up by first home buyers.
The government has released a calculator which allows people to see how much tax they will save and what size their deposit is likely to be over a projected period. You can check the calculator out here: First Home Super Saver Scheme Estimator.
There is also a fact sheet. You can check that out here: Fact Sheet – First Home Super Scheme
When it comes to your financial future the person most interested in it should be you. Successfully people take advantage of all of the opportunities that are made available to them. If this one is legislated don’t be scared to use it to your advantage.
If are looking to buy a home but don’t really know where to begin, then please give me a call. I would be happy to provide you with advice in relation to the costs associated with buying and a target deposit amount – so you have something to work towards. To make an appointment email me at firstname.lastname@example.org or call 0451 471 061
Margaret Godfrey is a mortgage broker in Newcastle who loves helping people buying their first home navigate the unfamiliar territory of applying for a home loan, as well as putting them in contact with other skilled professionals that can help too.