First Home Buyers Could Get A Boost With NSW Government Announcement

Hi, everyone, this is Carina Fox, your flexible mortgage broker. And I've got Aaron Whybrow, your bagpiping mortgage broker, here with me from Diagnostics and Finance. We're bringing to you a fresh weekly catch up. A news flash of the hot news off the press this week. We are talking about. Aaron, what article are we looking at this week?

We're looking at an article that came out around New South Wales. First home buyers could use contribution from the state government for their deposit for their first home. It seems like it's an announcement. It seems like it's testing the water about what is the reaction going to be in the marketplace?

Yeah, it definitely has a few comments there to say. You know, it's not been confirmed. They're not sure what percentage it is. So what is it exactly? What, what's. What's the information that's been provided to us on it?

So. So there's a little bit of information in regards to the government having a percentage of your home or equity. They use the word equity. So a little bit more technical charging, that's. That's an amount that someone owns in the house. Like you buy a house, you have 100% equity means you own a lot or you owe 90%, so you only got 10%. So equity is just a percentage of the ownership of the property. So it does show that the government's going to own a percentage of your property, not really a dollar figure. So that's a very interesting point there. It talks about how people can. It's hard to get into the market as a first home buyer, which we already understand it is. And I feel that there's other ways government can help, like stamp duty and things like that, which has been other announcements that we've heard in the past and not really seen the end result of that discussion going forward. So we've got these feels. It looks and feels like an announcement and not much to act on for someone that's looking and reading at the article.

So, you know, I definitely take from it that, um, it's a gauge of the market. Like you've said, it's a bit of a testing the waters to see what the interest is, maybe gain some, some traction on it. But, you know, the experience that we have is the phone calls that come along from clients that, you know, especially the first home buyers looking to get their foot in the door, reaching out and saying, I've seen this notice, is this available? How can I access it? And, you know, that does cause a little bit of trouble because information has been announced, but it's not setting concrete yet. You know, the legislation isn't there, the information's not there and it does give people a lot of excitement and then you're kind of let down a little bit that it's not quite finished yet. So like, where do you go from there?

I suppose for anyone that calls up in regards to an article like this, to us, we take a bit of a strategy, so we want to look and see if we can help straight away even if this scheme is not available to them. So there is legislative schemes that are out there as well. So first home buyers would understand that. So it's an opportunity when you do call up to talk to someone that's an expert in the area for your home lending for a first homebuyer that may not know where to start, but it could. I feel like sometimes it's a bit of a stress because we get a bit of a flurry in the market and our phones start running hot. Oh, there's another one talking about an announcement and there's another one talking about announcement and, and we just need to like, I get it, they got to test the market. There's no, no two ways about it really. Yeah, but. Yeah, but I'm trying to, I'm training myself to make it a positive when the customer calls. We can actually put them on the radar and help them out. What happens with some of your clients when they call up about some of these announcements? And we've had many of them over the last couple of years of COVID and things. We've had some come legislation like home builder package, we've got stuff about stamp duty that hasn't really come to fruition with New South Wales. We've even had in the industry like lenders, mortgage insurance and some action taken around monthly payments versus lump sum payments as well. So what have you seen when people call up, especially the first home buyer?

I think what it does is it starts a conversation. So it's a first home buyer wanting to get into the market, not knowing what their options are, hearing something that seems like it can help them. And I think that phone call, ultimately it just puts them on the right path. It enables us to start that conversation, let that journey begin. And it could be a matter of just discussions around purchase power and borrowing capacity. But you know, you need information to start making an informed decision. So even if the scheme hasn't been put into place yet, the phone call is still really important. It allows us to determine the strategy that best suits, you know, the client so you know, we've seen other states, there's different schemes in Western Australia and Queensland. So Queensland actually has a pathway shared equity loan and WA has a shared home ownership which has a similar feel to what the New South Wales government is announcing with this scheme. So it could be something that does come into play. I think what we need to do is be real about it and say, well, right now if you're wanting to step into the market now, it's not there. So you can't bank on something that you know isn't available to you.

You know, the really positive thing around having phone calls in regards to announcements is I've talked to a few people that they go to their, their local bank and all they want to know is what their borrowing power is and that's really only 50% of the picture or they want to know what their deposit is required to be and that's still only part of the picture because we might hit the marketing machine that says you only need 5% and, and your borrowing power based off income of X and liabilities of Y. But then what we find is when they come to us, we can go down the line of the purchase power which incorporates all the stamp duty, application fees, government charges and even some of those little niggly things that come at the end of the settlement like rates and water and stuff like that. And we can also structure the deposit around which lender is going to give the best deal. So that's a, that's a really, really cool thing there. And even with these types of announcements, there's been previous legislation put through with other schemes that we've seen like first home low low deposit schemes, single parenting, single family home schemes. We've got first home buyer stamp duty.

Yeah. The buyer assistance scheme. Yeah.

Then we've got the new and the old. So no matter how, no wonder our first home buyers are so got lots of schemes thrown at them and then some of them want to throw in the mix of moving state too to be able to negotiate that as well. And every state is slightly different, as you said. And even in New South Wales we have a section of a home buying helping scheme for our neighboring Aboriginal people as well where they can go to that specific New South Wales government department to get help there in conjunction with a major bank or a bank that allows that. So really interesting announcements coming out.

Yeah, I think I would take home from this one that the government, at every point each year each government puts out some announcement that they do want to assist first home buyers get into the property market and it is a challenge. And whether it's you trying to get into the market now or whether you talk to your parents, there was a scheme that was available to them at that time that they were buying. So part of it is don't have the fear of missing out, that you're not going to get it, that it's not going to be available because they come out with different schemes, different options. And as you said at the beginning, sometimes it's testing the water to see if it's, if it will take.

And that's. And that's what government relies on. Is that feedback so cool. Cool article. It looks like it's got some legs to run because other states have been doing it, because it usually has a bit more power when you're looking at other schemes like that. Not a bad thing to help you get into the market if it can come available. But there is a lot of schemes available right now and there's many, many different options that you can brainstorm and negotiate with a good broker to be able to get you into the right position, you with the right purchase power, right borrowing power and right strategy. And us at Diagnostics and Finance, we pride ourselves on getting to know you and know where you want to go, meet you where you are and move you to the next step in your financial education and understanding of what you want to do with home lending and finance going forward.