The state of millennial real estate has been the subject of much heated discussion over the past few years, and it’s easy to see why. According to a survey commissioned by Slater and Gordon Lawyers, up to 26 per cent of individuals in the Gen Y age bracket would have to rely on their inheritance just to find any sort of footing on the property ladder. With housing prices remaining relatively stable for the past several years, Australia’s current real estate landscape is being described as a housing affordability crisis.
With that said, however, all is not lost for those that are looking to make their first mark on the property ladder. Millennial real estate ownership has steadily risen in recent times, due to a wide variety of factors and influences.
In response to the issues that are being faced by new homebuyers, the Victorian Government has created several programs and initiatives. These include:
Through the HomesVic pilot, the Government is looking to help up to 400 first home buyers to speed up their entry into the property market. This pilot, which opened in February of this year, targets applicants with incomes of up to $95k for couples/families and $75k for singles. Whilst this pilot may not be the shining ray of hope many Australians are looking for, given that HomesVic takes a proportional benefit interest of up to 25% in the property, it is still a step in the right direction for those that are concerned about their future real estate prospects.
To the relief of many first time buyers, the Victorian Government has abolished stamp duty for new and existing properties that cost less than $600k. As an added bonus, those first-time buyers that are purchasing a home that costs between $600k and $750k will receive a tapered discount. This has been seen as the driving force behind more millennial real estate purchases and ownership in 2018 (coupled with the rising age of those in the Gen Y age bracket).
This change occurred at a similar time to alterations in the Residential Tenancies Act 1997, which also acted as a method of improving conditions for those outside the property investment landscape. With stamp duty being abolished and tapered for these price brackets, Gen Y first time buyers are finding it easier to compete with investors in the housing market.
Likely as a reaction to the two initiatives above, lending to first-time buyers has risen to 18.1% of national home loan commitments. This happened concurrently with overall first-time buyer loans seeing a slight drop in May. While it’s still early days, many are hoping that this is a trend that will continue to shift the Melbourne property landscape in favour of new buyers.
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