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First Home Loan Deposit Scheme extended for new builds, price caps increased

First Home Loan Deposit Scheme extended for new builds, price caps increased

The building industry has welcomed the extension of the federal government’s First Home Loan Deposit Scheme, but experts have warned of the risk of borrowers taking on more debt.

It will enable an extra 10,000 buyers who build new homes to get into the property market with a deposit as low as 5 per cent while avoiding lenders’ mortgage insurance, with the federal government acting as guarantor on the loans.

Price caps for the scheme will be lifted, allowing Sydney buyers to purchase a $950,000 home with a deposit of only $47,500. The previous limit was $700,000 and buyers were not restricted to new builds.

Melbourne’s cap will lift to $850,000 from $600,000, while Brisbane will lift to $650,000 from $475,000.

EXTENDED FIRST HOME LOAN DEPOSIT SCHEME PRICE CAPS
State/Territory Capital city/regional centre Rest of state
NSW $950,000 $600,000
VIC $850,000 $550,000
QLD $650,000 $500,000
WA $550,000 $400,000
SA $550,000 $400,000
TAS $550,000 $400,000
ACT $600,000 N/A
NT $550,000 N/A

Source: Housing Minister and Assistant Treasurer

Housing Minister and Assistant Treasurer Michael Sukkar said in a statement on Saturday the program would drive more construction and support jobs as the economy recovers from the COVID-19 pandemic recession.

“The additional grants will not only help first home buyers but also support the jobs of Australia’s tradies at a time when the economy needs it most,” he said.

Purchasers who build a new home worth up to $750,000 or undertake a substantial renovation can get $25,000 grants through the HomeBuilder scheme, which is limited to low- and middle-income earners.

But busy builders said the short time frame was forcing them to turn potential customers away to meet their obligations to current clients, while others in the priciest cities reported strong enquiries but few customers qualifying.

The industry has backed the latest announcement, saying it would support construction jobs.

Izaac Mathieson, general manager of sales and marketing of Queensland-based builder Hallmark Homes, said the extension of the scheme was welcome news.

“That’s a sensible approach given that the HomeBuilder grant runs out at the end of the year,” he said. “It’s great to see an incentive for first-home buyers and new builds into the new year.”

The scheme’s extension will allow first-homeowners in Brisbane and regional Queensland centres to access properties worth up to $650,000 – an increase from $475,000.

Mr Mathieson said any first-home buyer in the market looking for a home above $650,000 “probably doesn’t need the scheme”.

AMP Capital chief economist Shane Oliver noted recent plans to wind back responsible lending obligations had forced banks to scrutinise borrower expenses to make sure they could repay loans.

“Coming on the back of HomeBuilder and the removal of responsible lender obligations the Government is clearly focussed on supporting the housing market,” Dr Oliver wrote in a note to clients.

“The risk is that it just drives even more people into lots more debt and a possible eventual oversupply of homes given the hit to immigration.”

Stockland chief executive of communities Andrew Whitson said the program would help first-home buyers enter the market, adding that building new homes was an important job multiplier.

“The extension of the scheme will provide welcome stimulus and confidence to the new housing sector, particularly in NSW where the increased price cap will be most beneficial,” he said.

 “Buyer confidence is critical to help drive demand and continue to support jobs around the country, and this measure will help restore confidence in the market.”

Housing Industry Association managing director Graham Wolfe said the changes “will support jobs in the residential building industry”.

“The extra 10,000 places for new homes and apartments that the Government has put into this scheme will ensure more first home buyers achieve their goal of owning a home sooner,” he said.

Urban Taskforce chief executive Tom Forrest also welcomed the news, noting it would include the purchase of new apartments, but called on the federal government to apply a similar approach to the HomeBuilder grants.

“The HomeBuilder scheme remains difficult for new apartment purchasers,” he said. “The timeframes for the completion of construction simply don’t work for most projects. The thresholds effectively exclude most new properties in Sydney.”

The peak body for real estate agents called for the extension to be applied to buyers of established housing too.

“It would have been far better to not limit the additional places to new builds in terms of the economic impacts and first home buyer preferences,” Real Estate Institute of Australia president Adrian Kelly said, adding most first-home buyers choose established dwellings and some undertake renovations.

Minister Sukkar noted some buyers may be able to take advantage of the expanded low-deposit scheme, the HomeBuilder grant and state or territory incentives.

“Combined, the First Home Loan Deposit Scheme, HomeBuilder and the First Home Super Saver Scheme represent an unprecedented level of Federal Government assistance for home buyers and the construction industry alike,” he said.

Recent research found the average first-home buyer couple in Sydney would have to save for six years and six months for a 20 per cent deposit on an entry-level house, while Melbourne buyers face six years of saving.

The First Home Loan Deposit Scheme attracted strong interest when it opened in January, offering 10,000 places for the 2019-20 financial year. Another 10,000 places were opened on July 1 for this financial year.

This article is republished from www.domain.com.au under a Creative Commons license. Read the original article

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TAWAR RAZAGHI, ELIZABETH REDMAN

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Brisbane

Aria offer over 1,100 sqm of resort-style amenity at Trellis, South Brisbane apartments

The ground-level homes the Temple of Wellness, designed to be in-keeping with the lush foliage throughout the development

The award-winning Queensland developer, Aria Property Group, are taking the resident amenity to the next level in the latest South Brisbane apartment development, Trellis.

They’re offering residents offer 1,100 sqm of facilities scattered throughout the 13-level, Rothelowman-designed development, crowned by the most impressive amenity of all, the Residents’ Rooftop Club.

That will feature an infinity pool with views across Brisbane, a hot & cold magnesium bath, a lounge, public barbecue areas, and a private dining room.

The ground-level homes the Temple of Wellness, designed to be in-keeping with the lush foliage throughout the development.

A series of gardens line the path to the Temple of Wellness, where residents will walk through the cascading waterfall to a fully equipped fitness centre and meditation zone, home to weights, pilates reformers, cardiovascular equipment and meditation pods.

Aria Living also offers complimentary group yoga and group personal training fortnightly.

Aria Property Group

Trellis 20 Edmondstone Street, South Brisbane QLD 4101 

Residents at Trellis will also have access to a podcast/boardroom, serving as a multi-use space for working at home. There’s also a Residents’ Wine Cellar.

Apartments in Trellis start from $739,000 for an apartment with two bedrooms and two bathrooms. Three-bedroom apartments are priced from $1,084,000.

Completion is slated for mid-2023.

 

Article Source: www.urban.com.au

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Commercial Property

Fed up home buyers take plunge into commercial property

Home Buyers

A young woman in her 20s recently snapped up her first property – it was a ground floor shop leased to a jewellery business in South Melbourne.

The buyer, who declined to be identified, paid $900,000 and will earn income equivalent to a 5 per cent yield for her efforts.

Another first-time commercial buyer, Mark Murray, was priced out of the residential market for the type of property he was looking for and instead opted for a two-storey shop in High Street Northcote, in Melbourne’s inner north.

“This is my first property. I want to lease out some of the spaces,” he said.

Both buyers are part of a growing cohort looking at entry-level commercial properties as an alternative to the well trodden path of homeownership.

Sky high residential values – Melbourne’s house prices were up 15 per cent year-on-year in September – and changes to Victoria’s residential rental laws are pushing some would-be owners to look at alternatives.

Buyers are finding that the returns on residential real estate are so poor – with yields in the range of 1 or 2 per cent – that they prefer to buy something that will give them 3 to 5 per cent, which is commercial property.

Barry Novy from Gross Waddell ICR

The state’s new tenancy laws, introduced in March, have put a fresh onus on residential landlords: banning rental bidding, introducing minimum rental standards, changing eviction rules, and allowing modification of homes by renters – all of which has sharpened the difference with commercial property, real estate agents say.

Mr Murray said he planned to live in the upstairs section of his High Street property and turn the downstairs into artists’ workspaces and a recording studio. The shopfront, next to Sweet Life Tattoo, sold through Fitzroys’ Ervin Niyaz.

Mr Murray said it was a privilege to be able to buy something and share it with the creative community. “I’ll definitely earn an income but probably not as high rent as other places.”

The overheated housing market and superior rental returns are driving people towards commercial real estate, Stonebridge Property Group’s Dylan Kilner said.

The Dorcas Street building that sold in South Melbourne has a three-year lease to Unique Diamonds with fixed 3 per cent annual increases. Its outgoing expenses are also paid by the business tenant.

By contrast, residential leases are usually limited to one-year and have no set increases in rent with landlords required to pay outgoing expenses like extra water charges, taxes and maintenance costs.

“The buyer was a first-time investor who opted for an entry level commercial investment rather than a residential property,” Mr Kilner said.

Gross Waddell ICR’s Barry Novy said buyers should do their homework before taking the plunge into commercial property because of differences between the property classes.

“Buyers are finding that the returns on residential real estate are so poor – with yields in the range of 1 or 2 per cent – that they prefer to buy something that will give them 3 to 5 per cent, which is commercial property,” he said.

However, commercial property has a greater risk of long periods of vacancy, depending on market conditions. “You’ve got to be able to cover that,” he said.

Leasing contracts in the sector are also more complicated to negotiate and administer.

“There is also a misconception that if you buy commercial property you have less maintenance. That may or may not be true.”

 

Article Source: www.brisbanetimes.com.au

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Brisbane

Landmark Brisbane Hotel Sells for $50 Million

Landmark

A Sydney-based hospitality group has swooped on a landmark riverside Brisbane hotel at the northern end of the city’s iconic Story Bridge.

Oscars Hotel Group—owned and operated by brothers Bill and Mario Gravanis—has paid $50 million for the Oakwood Hotel and Apartments.

The 11-storey accommodation asset, on a prominent 2966sq m corner site at 15 Ivory Lane, has been offloaded by Singapore’s Mapletree Investments, which purchased it in 2015 for $48 million.

Formerly the Adina Brisbane Hotel, its sits above the Howard Smith Wharves precinct and Crystalbrook Vincent Hotel—originally The Fantauzzo—that was purchased last year by Syrian billionaire Ghassan Aboud in a $70-million-plus deal.

The four-star Oakwood Hotel and Apartments comprises 162 suites, a bistro, business centre, gym and pool but its new owners are expected to undertake a major revamp to capitalise on its prime location within the popular riverside precinct.

Its latest change-of-hands adds momentum to the rising wave of southern property players seeking geographic diversification due to the impact of Covid-19 lockdowns in New South Wales and Victoria.

Industry experts predict the flow of capital into Queensland’s property sector will continue its groundswell over coming years in the lead-up to the 2032 Brisbane Olympics.

The Gravanis brothers—known as Sydney’s kings of hospitality with a portfolio of more than 30 venues across NSW—made their big move into Queensland in May, snapping up Long Island in the Whitsundays for circa $20 million.

They are planning a new resort project for the island off Airlie Beach.

Oscars Hotel Group was established in 1986 with the acquisition of a single pub in Sydney’s inner-west.

Its purchases of Brisbane’s Oakwood Hotel and Apartments and Whitsunday’s Long Island are part of a strategic expansion to gain northern exposure in the tourism and hospitality sector.

CBRE Hotel’s national director Wayne Bunz negotiated the deal.

 

Article Source: www.theurbandeveloper.com

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