First home buyers will play a key role in the recovery of the Darwin property market over the next few years as the Federal Budget’s First Home Super Savers Scheme matures.
Darwin’s property decline of 2016 has already put first home buyers back on the hunt for houses and units, spurred by the Northern Territory Government’s reintroduction of the first home owners’ grant in April.
While the Super Savers Scheme was created to address concern over the affordability of the Sydney and Melbourne property markets, it may be Darwin that benefits the most.
The scheme allows first home buyers to save a maximum of $30,000 through additional superannuation payments of up to $15,000 annually. Couples can combine their savings to reach a deposit of $60,000.
If the NT Government maintains its first home buyers scheme, which provides $26,000 grant for new homes and $23,928.60 stamp duty discount for buying an established home up to $650,000, there will be a group of buyers entering the market in two to three years with up to $86,000 cash - in addition to any other savings - to put towards buying a property.
But will it be too late? Already, house and unit prices have fallen significantly – enough to get the first home buyers back into the market.
Green shoots of a recovery appeared in the first quarter of this year, when Darwin’s median house price grew 2.9 per cent, to $589,914, but it is still down 3.3 per cent year on year, while the median Darwin unit price is down 18.7 per cent at $395,473 on 12 months ago.
These are numbers that are getting young people interested in buying again, and local agents have confirmed this is the case. First home buyers are reportedly outnumbering investors in Darwin for the first time in years.
The return of the first home buyers is good news, as the city will not be able to rely on a return of investors, who are no longer able to deduct travel expenses as part of negative gearing adjustments in the latest budget.
And the mining construction boom has ended, so it is unlikely there will be any large infrastructure projects in the pipeline to make prices boom again.
With Baby Boomers taking advantage of reduced unit prices to downsize their living arrangements, it presents a prime opportunity for first home buyers to get into their dream home over the next two years, backed by first home buyers grants and Super Scheme savings.
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