Grants spark house spree
VICTORIANS with virtually no savings are banking on government grants as house deposits in a rush to cash-in on unprecedented homebuyer support.
A regional mortgage broker has revealed buyers with as little as $6000 — and some with $5000 cheques from their parents but no savings of their own — are snapping up land in anticipation of the federal government’s $25,000 HomeBuilder grants.
Announced on June 4, the grants are available to those building a home for less than $750,000 and with incomes below certain thresholds.
They are also available for renovations between $150,000 and $750,000.
Geelong-based Loan Market broker Sarah Thomson said up to eight clients a week were calling her with little more than the $25,000 federal grants and up to $20,000 in state-sponsored grants for first-home buyers building in regional areas.
With Victorian first-home buyers also able to dodge stamp duty payments for homes under $600,000, the $45,000 combination covers more than 10 per cent of a $400,000 house-and-land packages available in some regional areas.
“If they are renting at the moment and can show that, some banks are taking that as proof they can save (or pay a mortgage),” Ms Thomson said.
“We have people with no savings ..— people whose parents might give them $5000.”
Curlewis nurse Caitlyn Arnold was planning to spend her 30th birthday this year in America. But after COVID-19 ruined those plans, she used her $6000 holiday fund as a deposit for a St Leonards block of land near the beach and hopes to be in her first home by February.
“The day after it (HomeBuilder) was announced, I started looking at display homes and I made the offer for the land on June 10,” Ms Arnold said.
With government funding, she expects to have a 12 per cent deposit for the home.
Home building group Burbank’s national head of residential housing, Louis Sultan, said while Geelong, Ballarat, and Bendigo had “all been kicking along quite well”, he believed few builders or lenders would accept the government grants as a deposit.
However, with some land being sold after the initial buyer lost their job due to COVID-19, Ms Thomson has found sellers willing to accept deposits as low as $5000$10,000.