According to Domain, first home buyers (FHBs) continue to access the Morrison Government’s deposit subsidy scheme, which was launched in January and allows FHBs to purchase a property with just a 5% deposit:
Of the 10,000 places available, the latest statistics from federal Minister for Housing Michael Sukkar show that nationally 4147 certificates have been issued for those who have already bought a property.
A further 3909 places are on hold waiting for the purchase of a property while only 1944 places are still available…
40Forty Finance director and mortgage broker Will Unkles said he had been “busier than ever” helping first-home buyers with their loans despite the impacts of social distancing on the market…
“My recommendation is be very cautious… With properties expected to drop in value over the next six months, and perhaps for even longer, that means you could be borrowing more than what the house is worth.”
Most forecasts for the Australian property anticipate heavy falls in prices.
For example, CBA senior economist, Gareth Aird, forecasts that prices nationally to plunge by 10% over the next six months, with heavier falls expected in Sydney and Melbourne.
UBS expects property prices to fall by 10% over the next 12 months.
SQM Research forecasts falls of up to 30% in the worst case scenario, but likely lower.
Either way, FHBs that purchased recently with only a 5% deposit are likely to be plunged into negative equity.
