First home buyers have just received an early Christmas gift, of sorts, with an uptick in the number of lenders that have signed up to the Home Guarantee Scheme (HGS).

Three Westpac brands, St.George, Bank of Melbourne and BankSA, have added their names to the list of lenders available to first home buyers under the HGS.

If you’re not familiar with the HGS, it gives first home buyers an opportunity to buy a place of their own with as little as a 5% deposit (and no lenders mortgage insurance) through the First Home Guarantee or Regional First Home Buyer Guarantee.

First home buyers aren’t the only ones to benefit. The HGS also includes the Family Home Guarantee, which allows solo parents to buy a home with just a 2% deposit.

More competition is good news for home loan rates

According to Housing Australia, which runs the HGS, first home buyers can now choose from 33 lenders participating in the scheme.

This includes most of the big banks (ANZ has not signed up) plus a generous variety of small banks, credit unions and non-bank lenders.

The extra sweetener is that more lenders can boost competition, which potentially encourages banks to keep their interest rates low for first home buyers.

Buying with a 5% deposit helps get you into the market sooner

Saving a deposit is often the key barrier for first home buyers. And when home prices and cost of living are rising, it can seem like the goal posts are constantly moving out of reach.

The beauty of the HGS is that it lets first home buyers jump into the property market about four years earlier (on average) than they normally would.

So, it’s no surprise that last financial year one-in-three first home buyers purchased with the help of the HGS.

Better yet, new data from Housing Australia shows that first buyers who have tapped into the scheme are now sitting on $82,000 in home equity, on average.

It’s a great result, especially when you consider that the average first home deposit across the scheme was just $35,200 in 2020, rising to $36,400 in mid-2023.

Compare that to the average deposit of $159,000 across the broader first-home buyer market, and it’s easy to see how the 5% deposit scheme gives first-home buyers a valuable leg-up into the market sooner.

How to choose the right loan for you?

With more than 40 lenders offering 5% deposit home loans under the HGS, the challenge can be choosing the loan and lender that’s right for your needs (or finding one that will take you on if your application is a bit touch and go, or if you’ve just started your own business in recent years).

The simple solution is to give us a call.

We can explain whether you’re eligible for the low-deposit scheme, and answer any questions you may have.

We’ll also take the time to understand your needs, so you can be confident that the lenders and loan products we put forward to you are a good fit.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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Store shelves are starting to be lined with tinsel, ‘Santa stop here’ signs are popping up around the neighbourhood, and chances are you’re beginning to hum a few bars of Jingle Bells.

Yes, Christmas is just around the corner, and now’s the time to plan for what can be a pricey time of year.

After 13 rate hikes in close succession, plenty of homeowners are feeling the squeeze of higher home loan repayments.

The good news is that you (hopefully) won’t have to cancel Christmas this year. Below are three clever hacks that could help you manage your mortgage over the festive season.

1. Follow Santa’s lead – make a list (or two)

Plan ahead by listing all the fixed expenses you’ll face in December such as utilities, your home loan, car loan, and credit card repayments, as well as less frequent bills such as council rates that may fall due before Christmas.

Add up the total to know how much you need to set aside. It’s a good idea to try and prioritise these bills over seasonal spending.

Next, draft up a Christmas spending budget that allocates money to gifts, food, drinks and decorations.

Finetune your budget based on your ability to pay, bearing in mind the upcoming costs you identified in the bill list.

If things are looking tight this year, consider opting for Secret Santa instead of everyone buying everyone a present.

It can help make the giving experience more personal and is definitely gentler on the hip pocket.

Websites like elfster.com can help keep it anonymous and straightforward for everyone.

2. Plan for how you’ll pay

It can be tempting to pay for Christmas purchases with a credit card or buy now, pay later. But these options can just mean kicking the can down the road until January when payments fall due.

It’s also worth noting that late payments on either option could affect your credit score for any future home loan applications.

So where possible, consider reaching for your debit card for festive purchases. It’s hard to get into too much trouble when you pay using your own money.

3. Ask your lender for a gift

Christmas is the season of giving, so why don’t we hit up your lender for the gift of a lower interest rate?

Reserve Bank data shows there is still a gap between the rates on new versus established loans.

If you took out your loan through us, get in touch and we can either reach out to your lender on your behalf for a discount or, if they don’t come to the party, help you explore your refinancing options with another lender.

Don’t let Christmas spending ruin your home loan plans for 2024

It’s easy to get swept up in seasonal good cheer. But it can sometimes be important not to get too carried away with Christmas spending.

If you plan to refinance your home loan or purchase a house in 2024, a lender will likely look at your spending patterns over the past few months.

Hamming up your purchases in December can bump up your average living costs, and if you go way over the top, potentially see you knocked back for a new loan in the new year.

Want more tips to manage your mortgage over the holiday season? Call us today for more festive saving strategies.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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Will the RBA’s latest 0.25% cash rate rise squeeze you financially? (not to mention the other 12 rate hikes!)

The majority of lenders lost no time increasing their variable home loan rates following the Reserve Bank of Australia’s 0.25% Melbourne Cup Day rate rise.

According to Mozo, the 13th rate hike since May 2022 has pushed up the average variable rate to 6.62%.

What does that mean in dollars and cents?

On a $500,000 variable rate home loan payable over 25 years, the latest 0.25% rate hike can see monthly repayments jump by $78.

For homeowners who didn’t have much fat left to cut from their budget, those extra dollars can be hard to find.

One potential strategy that may help to lower repayments is to stretch out your loan term.

How extending your term can reduce repayments

If you have a 25-year loan, your lender may give you the option to extend for up to five more years, possibly pushing out the term to 30 years.

If you get the green light, this kind of reset can significantly lower your monthly repayments.

On the $500,000 mortgage we looked at earlier, moving from a 25-year loan to a 30-year loan could cut monthly repayments by around $214 – even after allowing for the November rate hike.

The hidden cost of a longer term

There’s a lot to love about the prospect of slashing a couple of hundred bucks off your loan repayments each month, especially as we head into the festive season.

But pushing out your loan term can come with a hidden cost.

Taking longer to pay down your loan means you’re also paying interest for longer. And while your repayments can decrease, the long-term interest cost can skyrocket.

Stretching a $500,000 loan from 25 to 30 years could mean paying a whopping $128,000 more in total interest.

It’s worth keeping in mind though that those extra interest repayments aren’t a given.

You may be able to close the gap and cut down the interest cost by either making extra repayments in the future, loading up an offset account, or paying off the loan early (if, for example, you receive a lump sum inheritance).

So the upshot is that stretching your loan term can be a short-term fix now, but you’ll have to weigh up the costs against the benefits, not to mention whether you think you’ll be in a better financial position later down the track to pay down the loan quicker (and thus reduce the interest payments).

Other ways we can help

Along with exploring extending the length of your loan, we could also help you look into other solutions to ease the pain of higher rates.

Options that may be available with your lender include:

– temporarily lowering your loan repayments;
– deferring repayments for a while; or
– shifting you to interest-only payments for a set period.

The common thread is that the earlier you reach out for assistance, the sooner we may be able to help you get some financial relief.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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Some more tough news for mortgage holders around the country today.

Despite the official cash rate being on hold since June (and many hoping it would stay that way), the RBA has decided to press ahead with a second consecutive Melbourne Cup day rate rise in an attempt to rein in inflation.

This means we’ve now had 13 rate hikes in 18 months since 1 May 2022, and it takes the official cash rate to its highest level since November 2011.

It also happens to be the first rate hike under new RBA Governor Michele Bullock, who commenced in the role in September.

So why did the RBA raise the cash rate?

Governor Bullock said while inflation in Australia had passed its peak, it was still too high and was proving more persistent than expected a few months ago.

“While goods price inflation has eased further, the prices of many services are continuing to rise briskly,” she said.

“While the central forecast is for CPI inflation to continue to decline, progress looks to be slower than earlier expected.”

Governor Bullock added the RBA Board judged an increase in interest rates was warranted today to be more assured that inflation would return to target in a reasonable timeframe.

“If high inflation were to become entrenched in people’s expectations, it would be much more costly to reduce later, involving even higher interest rates and a larger rise in unemployment,” she said.

How much could this latest hike increase your mortgage repayments?

If you’re on a variable-rate home loan, the banks will likely be increasing the interest rate on it very shortly.

For an owner-occupier with a 25-year loan of $500,000 paying principal and interest, this month’s 25 basis point increase means your monthly repayments could go up by about $76 a month.

That’s an extra $1,211 a month on your mortgage compared to 1 May 2022.

If you have a $750,000 loan, repayments will likely increase by about $114 a month, up $1,816 from 1 May 2022.

Meanwhile, a $1 million loan will increase by about $152 a month, up about $2,422 from 1 May 2022.

Need help reining in your mortgage? Get in touch

Are you feeling the pinch? You’re not alone. Many households around the country are feeling the effects of 14 rate hikes in 18 months.

There are also lots of people on fixed-rate home loans wondering what options will be available to them once their fixed-rate period ends.

Some options we can help you explore include refinancing (which could mean increasing the length of your loan and decreasing monthly repayments), debt consolidation, or building up a cash buffer in an offset account.

So if you’re worried about how you might meet your repayments going forward, give us a call today. The earlier we sit down with you and help you make a plan, the better we can help you manage your mortgage moving forward.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

The post RBA increases the cash rate by 25 basis points, up to 4.35% appeared first on OZO.

In the nine months to 31 March 2023 (while interest rates were rising), mortgage brokers helped settle more than 70% of all new residential home loans, according to the latest data from the MFAA.

It’s the first time ever that brokers have helped settle more than 70% of home loans over a three-month-plus period.

For context, just two years earlier brokers were helping settle between 50-60% of new home loans.

So why are more Aussie home buyers turning to mortgage brokers?

For starters, it looks like word is getting out about how much help we can provide when it comes to giving you an informed choice with your home loan.

And in this environment of higher interest rates, it’s important to be sure your home loan offers value.

With a wide network of lenders – including big banks, small banks and non-banks – brokers are well-placed to help you choose the loan that’s right for you.

It doesn’t end there, though. Here are five more reasons why Australians are turning to brokers for help.

1. Brokers do the legwork

There are hundreds of home loans to choose from. But who’s got the time to find a loan that suits your needs?

Your broker does.

Better still, your broker does a lot of the legwork, sorting the paperwork and supporting your loan application right through to settlement.

That lets you sit back, relax, and focus on moving into your new home.

2. We’re flexible

You’re busy, right? That’s why brokers offer flexible appointment times.

Want to chat after hours? No problemo.

Prefer to chat online rather than face-to-face? Can do.

It may seem like a minor benefit, but the flexibility brokers offer is a big deal when you’re flat out with work, family, or just busy house hunting.

3. Brokers provide tailored facts

Brokers provide clear details to help you make informed decisions.

From your borrowing power, to how much of a deposit you really need, and what your loan repayments will be under various scenarios, we’ll crunch the numbers based on your unique situation.

It takes the guesswork out of buying a home and lets you plan ahead.

4. No additional costs and a best interests duty

It often comes as a surprise that a broker’s home loan help comes at no cost to their clients. That’s because brokers are paid a commission by lenders.

Rest assured though that unlike the banks, we’re (happily) bound by a best interests duty that means we’ll always put your best interests first.

So while banks and digital lenders might try to tempt you with cashback offers for loan products that may not really be in your best interests (due to fees, high interest rates, and other undesirable loan terms), we’ll only ever try to match you up with lenders and loans that are in your best interests.

5. Brokers keep working for you over the long term

Chances are you’ll have your home loan for quite a few years.

We’ll be with you along the way to help make sure your home loan continues to be the right option for you, no matter how your life changes.

So call us today to see why more Australians than ever are partnering with a broker.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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One of the biggest drivers of property price rises right now is … drumroll … population growth, according to PropTrack.

Let’s take a look at the cities more people are expected to call home.

Is the regional renaissance over?

During the height of the COVID-19 pandemic, Australians were flocking to regional areas.

The population of regional Australia grew by 70,900 people during 2020-21 – the first time in over 40 years that the regions outpaced capital cities.

However, the COVID-inspired rush to the regions is reportedly over.

Despite the new work-from-home trend, the reopening of borders is seeing a return to urban living.

According to property exchange platform PEXA, this will see two-thirds of Australia’s population growth concentrated in four cities over the next two decades.

Which cities are set to benefit?

PEXA is predicting population growth of 7.4 million between now and 2041.

That’s a lot of people looking for a place to live.

It’s not just about net migration to Australia, either.

Regional dwellers, especially younger people, are expected to head to urban areas, attracted by the availability of study and work opportunities.

The upshot is that two million new homes will be required over the next 18 years, and 67% of population growth will be concentrated in Sydney, Melbourne, Brisbane and Perth.

The stats are astonishing.

PEXA says the four hotspot cities require vast numbers of new homes:

– 723,000 in Melbourne (that’s 40,000 new homes per year, or 772 per week);
– 582,000 in Sydney;
– 381,000 in Brisbane; and
– 334,000 in Perth.

Adelaide meanwhile is predicted to need at least another 141,000 dwellings between now and 2046.

What does this mean for property buyers?

For starters, increased demand on this scale is expected to continue to push up property prices unless supply can increase at a similar pace.

Despite higher interest rates, already we have seen values rise in all of these four cities over the past 12 months.

CoreLogic says property prices have soared 7.3% in Sydney over the past year, 5.0% in Brisbane, a whopping 8.8% in Perth, and a comparatively modest 1.5% in Melbourne (and 5.0% in Adelaide).

So if you own property in these cities, you could be sitting on more equity than you realise – with potentially more to come.

Or, if you’re considering buying, particularly as an investor, it could be worth looking at one of these hotspot cities – even if you don’t live there yourself.

Are you home loan ready?

No matter where you plan to buy, understanding your borrowing power is a key starting point.

Give us a call today to find out how much you can borrow and what grants and schemes you might be eligible for to help fund your next purchase.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

The post Revealed: the four cities tipped to be future property hotspots appeared first on OZO.

Home loan refinancing is a hot topic right now.

Ever since interest rates hit an upward trajectory in May 2022, skyrocketing numbers of homeowners – as many as 28,000 each month – have turned their attention to refinancing.

However, plenty of Australians could be missing out on the savings of refinancing simply because they’re unsure of what’s involved.

Research by Finder shows one-in-five people are in the dark about refinancing, while 63% admit to being only “slightly confident” in their knowledge of refinancing.

So, let’s take a quick look at what refinancing is, and how it can reduce stress by potentially putting cash back in your pocket.

What does refinancing mean?

Refinancing simply means replacing your old mortgage with a new loan and lender.

The process is similar to the one you followed to apply for your current loan.

You decide the loan you’d like to switch to, make a formal application, and provide evidence of income, expenses, and your personal ID.

If the loan is approved, you can sit back and relax as the new lender arranges to pay out your old loan. When that’s taken care of, you just start making repayments to the new bank.

Refinancing can be a surprisingly simple process. Better still, it can all happen very quickly, usually taking about four weeks from start to finish.

Refinancing can be a stress buster

Refinancing can be an opportunity to access home equity, enjoy better loan features, or consolidate several personal debts.

But the number one reason for refinancing is to save money by paying a lower loan interest rate. Those savings can help take the financial pressure off homeowners.

According to Finder, 60% of refinancers admitted to being stressed about their home loan before deciding to switch.

If that sounds like you, making the move to a new loan could be a valuable stress buster.

How much could you save by refinancing?

Potentially, a lot!

That’s because lenders are still saving their best deals for new customers.

The average rate on established loans is currently 6.20%. But if you’re a new customer, you’re more likely to pay an average rate of 5.99%.

That’s an instant saving of 0.21% interest. Think of it as reversing almost one official rate hike.

So what does that rate difference mean for your hip pocket?

Right now, the average loan being refinanced is worth $526,093. On that balance, a 0.21% rate saving could slash more than $70 off each monthly repayment, which equates to $840 in the first year alone, assuming a 30-year loan term.

Is refinancing right for you?

If you’re starting to feel the interest rate squeeze, give us a call today to discuss your refinancing options.

We’ll help you work out if refinancing is the right step for you and how much you could save by switching to a new loan and lender.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

The post How much can you really save by refinancing? appeared first on OZO.

First home buyers are ignoring headlines warning that it can take years to save a deposit.

Instead, they’re flocking to guarantee schemes that allow them to get into the market with just a 5% deposit – and without the cost of lenders’ mortgage insurance (LMI).

NHFIC, which runs the First Home Guarantee schemes set up by the federal government, says that in 2022/23, close to one-in-three first home buyers tapped into the guarantee schemes.

That’s up from one in seven the year before.

In total, 41,700 home buyers got into the market with the help of guarantee schemes last financial year, following an uptick in the number of places available.

Younger Australians are buying a home

What’s especially exciting about NFHIC’s research is that it shows the schemes are allowing younger buyers to crack the property market.

In 2022/23, more than half of all places in the First Home Guarantee and Regional First Home Buyer Guarantee were taken up by people under the age of 30.

There has also been a fivefold increase in the number of buyers aged 18-24.

Key workers are buying with just a 5% deposit

The low deposit schemes are also helping a growing number of key workers such as teachers, nurses and social workers purchase a home.

Around 7,721 guarantees were issued to key workers last financial year. Great news for these essential workers in our community!

Debunking the low deposit myth

The First Home Guarantee has at times attracted criticism. This has largely been around the risks of buying with just a 5% deposit, which can mean taking on a larger loan with higher repayments.

But NFHIC data suggests this hasn’t been a problem.

Fewer than 0.1% of homeowners using the schemes have fallen behind on their loan repayments, which is less than the market average for all buyers with a low deposit loan.

Better still, close to 10,000 scheme borrowers (over 12% of total guarantees issued to date) have already transitioned out of the scheme, with most of these buyers having accumulated enough equity to achieve a loan-to-value ratio (LVR) of less than 80%.

Could you be eligible for a 5% deposit scheme?

If you’re a first home buyer struggling to save a 20% deposit, it’s good to know there is a pathway to home ownership that can get you into a place of your own sooner.

And it can also help you to avoid paying LMI – which can cost you anywhere between $4,000 and $35,000, depending on the property price and your deposit amount.

Conditions apply for the 5% deposit schemes, but new rules mean you can buy with a sibling or mate and still be eligible for this valuable financial helping hand.

With property values rising in many markets across Australia, time is of the essence.

Call us today to see if you can buy a home with a 5% deposit and zero LMI.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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Another month, another round of price upticks.

September marked the eighth consecutive month of home price growth, with CoreLogic saying property values nationally are up 6.6% since January.

That’s a solid price hike. The crazy thing is that prices are soaring despite a whole slew of interest rate hikes over the past 18 months.

So what’s pushing prices higher?

The key factor putting a rocket under property prices is a shortage of homes listed for sale.

Homeowners are sitting tight rather than selling across a number of cities, and that’s increasing competition between buyers.

According to CoreLogic, Adelaide, Brisbane and Perth have particularly low levels of homes for sale – around 40% less than previous 5-year averages.

There’s a bit more choice for buyers in Sydney and Melbourne, but both cities are still recording housing price gains (Sydney in particular).

That’s because rising prices aren’t just about a lack of homes listed for sale.

Record levels of net overseas migration are also a contributing factor.

In the year to March 2023, net overseas migration added 454,400 people to our population. That’s an extra 1,245 people each day, all looking for a home.

And according to ABS data, most immigrants settle in Sydney and Melbourne.

So as you can see, despite high interest rates, there’s upward pricing pressure on the nation’s five biggest capital cities (Hobart, Darwin and Canberra meanwhile have all seen house prices drop over the past 12 months).

Will values go higher?

At the current rate of growth, CoreLogic predicts we could see national housing values reach new highs as early as November.

Already, homes in Perth and Adelaide have smashed previous price records, notching up median values of $618,363 and $691,591 respectively in September.

Brisbane homes look set to reach record values in October, with the city’s current median home value ($761,379) just 0.6% below the previous peak.

What does this mean for home buyers?

As home prices nudge towards new highs, PropTrack says last year’s price falls have been completely reversed.

And most of the data suggests that prices are unlikely to take a tumble any time soon.

That’s because it’s possible that interest rates have peaked, population growth is rebounding strongly, and there is a shortage of new home builds.

Already we’re seeing a surge in home loan applications as more Australians recognise the current market provides a window of opportunity to buy before values rise higher.

No matter whether you’re buying a first home, second home or investment property, buying today could help you beat future price hikes.

So if you’ve got your eye on the property market, call us today and we can help you assess your borrowing power in the current climate, and even help line you up with pre-approval so you’re ready to strike when the opportunity arises.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

The post The one big factor pushing house prices up appeared first on OZO.

For many of us, buying a house on its own block of land is the ‘great Australian dream’.

While plenty of people achieve this goal, our property journey is often book-ended by apartment living.

For first home buyers, units can be an affordable choice, costing around 30% less than houses according to CoreLogic.

Then, as we head into our senior years, an apartment offers secure, low-maintenance living, often with a wealth of amenities right on the doorstep.

Apartment demand is outstripping supply

Apartments may be affordable today, but a lack of new apartment construction, coupled with rising immigration levels, points to a looming apartment shortage according to CoreLogic.

And that could push values higher.

Over the next few years, new apartment construction is forecast to be 40% lower in the 2010s, leading to a shortfall of over 100,000 homes by 2027.

Close to 60% of the new home shortfall is expected to be in the apartment market.

On the demand side, CoreLogic says a stronger-than-expected level of migration into Australia has seen overall housing demand “skyrocket”.

Historically, new migrants head to the high-density areas of our big cities, putting extra pressure on the unit market.

As CoreLogic explains, with interest rates potentially easing in 2024, greater demand and tight supply could fuel a “price boom” in the unit market.

Why more of us are choosing apartment living

Modern apartments are packed with the latest design and sustainability features, meaning they are no longer the poor relation of freestanding houses.

Across our major cities, apartments now account for 30% of all homes, up from 23% in 2010.

And the appeal doesn’t just lie with affordability.

Today’s apartments usually come with a wealth of benefits, including:

Government schemes: because apartments are generally cheaper than houses, they’re more often under the price caps for a range of government schemes, including the Home Guarantee Scheme, stamp duty concessions, and first home owner grants (usually for new builds). These schemes can be combined to potentially save you tens of thousands of dollars and get you into the property market years sooner.

Sought-after locations: apartment living can be the difference between living close to work, or facing a long daily commute from the outer suburbs.

Lifestyle advantages: the days of apartments being cramped and lacklustre are over. A variety of on-site amenities, from barbecue areas to pools, gyms and car-wash bays, make unit living convenient and relaxing.

Low maintenance living: not interested in spending precious spare time mowing the lawns or cleaning the gutters? It turns out plenty of others aren’t either. Unlike houses, units require minimal upkeep, letting residents enjoy more quality time.

Improved security: if you’re after a lock-and-leave lifestyle, modern apartments fit the bill. Advanced security features add up to a safe and secure living environment.

Is now the time to take the leap?

Right now, apartments still present an affordable option for first-home buyers, downsizers and investors.

The median apartment price across our state capitals is currently $637,593 – but if CoreLogic is correct, that figure could soon increase as demand outstrips supply.

So if you’d like help exploring your options to purchase your first property – for example, with just a 5% deposit via the Home Guarantee Scheme – then get in touch today to discover your borrowing power.

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