Upside to Property Price Rise for First Home Buyers

Property Price Rise Silver Lining for First Home Buyers

Despite multiple interest rate increases the Australian housing market has surprised analysts and experts as property prices stabilise and even rise. Rising house prices may concern some, but beneath the surface lies a silver lining, offering valuable opportunities for those aspiring to step onto the property ladder. Let’s explore three positive aspects of the current market conditions, focusing on how first home buyers can leverage these advantages to achieve their homeownership goals.

1. Equity building

The upward trajectory of house prices indicates a resilient housing market. For first home buyers, this presents an opportunity to enter the market at a time when properties have the potential for long-term capital appreciation. First home buyers will be well-positioned to build equity and wealth in the real estate market by investing in a property that is likely to increase in value over time. 

According to CoreLogic’s national Home Value Index, the Australian property market has been experiencing a sustained recovery, with values rising by 1.1% in June, following a 1.2% gain in May. Despite lingering -6.0% below peak levels recorded in April 2022, the remarkable rebound presents first home buyers with an excellent opportunity for equity building.

What’s so good about equity?

As property prices appreciate, homeowners gain equity in their properties. For first home buyers who can secure a foothold in the market during this period of recovery, their homes’ increasing values can act as a stepping stone to future investment opportunities. You can use the built-up equity to upgrade to a bigger house, invest in more properties, or support other financial goals.

2. Government initiatives and schemes

PropTrack’s data shows that Australian home prices jumped again in June, rising by 0.3% month-on-month. Furthermore, national prices are now just 0.1% lower than a year ago. While this might appear to make affordability more challenging, first home buyers have an exclusive opportunity to access government programs designed to support their entry into the housing market. 

Government grants and schemes for first-home buyers are now more accessible than ever, offering a lifeline to those aspiring to own their dream home. Amidst rising house prices, utilising these programs can be a strategic move for first-time buyers to secure their foothold in the property market.

The First Home Guarantee stands out as a significant opportunity. This scheme allows eligible first-home buyers to purchase a new or existing home with just a 5% deposit, without incurring hefty Lenders Mortgage Insurance (LMI) costs.

With limited places and various benefits available under these government grants and schemes, taking advantage of them amidst the rising house prices can be a game-changer. If you’re unsure of your eligibility or need assistance navigating the application process, our specialist mortgage brokers are ready to help.

3. Stability and confidence in the market

As the CoreLogic Home Value Index indicates, the property market’s rebound has been ongoing since finding a floor in February. This suggests that the market is moving into a phase of stability, which can be beneficial for first home buyers in several ways.

Stability in the property market provides a more predictable environment for potential buyers to make informed decisions. Rather than facing the uncertainties of a market downturn, first home buyers can enter the market with greater confidence. Additionally, the current phase may present opportunities for buyers to negotiate better terms and prices with sellers’ eager to capitalise on the recovering market.

While rising house prices may initially seem daunting, there are significant positives for first home buyers within the current Australian property market. The ongoing recovery offers the potential for equity building, reaping the benefits of incentives and schemes, and long-term stability.

As you navigate these dynamic market conditions, it’s essential to stay informed, be proactive, and seek expert advice. If you’re considering taking advantage of the opportunities presented by the changing property landscape, NMC Finance is here to support you every step of the way. 

* This blog is intended for general informational purposes only. For personalised advice tailored to your unique financial situation, please contact NMC Finance.

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