What does tighter lending mean for first homebuyers?
Everyone’s freaking out about the 2018 Royal Banking Commission and wondering what it means for lending. Things have definitely become more conservative since last year, but never fear, friends, this could be a good thing for you.
Banks were all ‘yeah, that looks about right,’ when they were assessing applications, which made it pretty easy to get a loan if you had a decent deposit, savings history and ability to make repayments. But they weren’t looking closely at other lifestyle expenses, council rates and property maintenance.
Believe it or not, the banks actually like millennials. Because you’re young, you have decades to pay off your investment and your salary will probably go up over time. You’re a better bet than an old investor who’s heading towards retirement. You just have to be able to prove you can afford your deposit and mortgage as well as the extra costs of living, like food.
Stabilising house prices, reduced investor activity (due to the tighter lending) and really good incentives make this coming year a great time to have a crack at getting into the market. In Victoria, stamp duty on houses worth up to $600,00 has been abolished, which has been a massive hurdle for first homebuyers.
You could get this ripper in Northcote, which is going for $600,000. It’s only a one-bedder, but it is a reasonable size and that reno is schmick.
While in Sydney, there are also first homebuyer concessions to take advantage of. Here, they’re offering a stamp duty exemption on new and existing homes worth up to $650,000 as well as land valued up to $350,000 so you might finally be able to get hold of that little dream shack. This art deco room with a view is up for grabs in Darlinghurst. The asking price is $650,000. Admittedly that’s still a lot, but can you really put a price on a window bench seat in the heart of town?