Read my South East Queensland update for July 2021.
When it comes to property and home loans, it can be over whelming to keep up to date with what is both useful and interesting to know.
Every week I am seeing heaps of facts and figures about interest rates and new home prices in QLD.
Daily I talk to families or individuals looking to buy a homes, through to bankers and other housing experts.
So here I summarise what I think are the most interesting and hopefully beneficial facts, observations and opinions for the month.
I hope it might just help you or someone you know buy their home, and get ahead with their home loan.
This is an edited version of the regular YouTube update which you can watch here.
Today I cover:
- Monthly House price jump – Brisbane V regional QLD.
- QLD locals are being outbid at auctions – my advice on how to get a property.
- Success buying with a letter box drop.
- First home buyers get government help to buy sooner – what programs are there and what’s new.
Monthly house price jump – Brisbane V regional QLD
Hi, welcome to the update for July 2021 on property and finance around Southeast Queensland.
The first thing to note which is quite interesting is that in Brisbane, home prices were up by 2% for the month, and regional Queensland was actually up by slightly less than 1.9%.
Now this means that on a $600,000 property… 2% is around about $12,000.
So over the four weeks of May, what they are saying is prices actually increased in value by about $3,000 a week on average.
Now what’s really interesting is that ordinarily, in a normal market, you normally will see house prices increasing, a little bit faster in the capital cities, whether that be Brisbane, Sydney, Melbourne, etc.
And then to a lesser extent in the regional areas. All right.
But what happened in COVID is that changed.
You had a lot of transitions of people moving from the city out into, you know, more regional areas.
So you had people moving to the Sunshine Coast, up to Toowoomba also the Gold Coast, and you know, getting free of the capital city.
And you also had a lot of people moving to regional QLD from inter state as well.
So we had, you know, 12 months where, if you have a look at new home prices in the regional QLD markets, they actually performed better than Brisbane.
They are more affordable, and also because there’s a little bit more of a lifestyle scene there.
But it seems like from the reports, that’s actually tapering off, and that we could be towards the finishing of that.
Okay, so it will be interesting to see how that turns over the next six months and to see if that continues.
This will mean that, you know, you could see better price growth in Brisbane again compared to regional QLD.
QLD locals are being outbid at auctions – my advice on how to get a property.
Now let’s talk about some individual things that we’re seeing on a sort of much smaller level.
I’ve got a few clients at the moment who are buying by auction.
It’s very popular at the moment to go to auction.
In Queensland, there used to a listed price for new homes and people would make an offer.. but at the moment because it’s a very competitive market, a lot of places are going to auction or ‘make an offer’ and all that kind of stuff.
So, we’re still getting a number of our clients, actually a lot of our clients are missing out.
They are, you know, the second or third or fourth best offer.
But what the online auctions are doing and what’s interesting is, is when everyone registers for those you can actually see their names.
I’ve heard from a number of clients over the past fortnight, that when they see those other people bidding on an online auction, they Google their name, and they’re seeing that nearly all of them are coming from Sydney and Melbourne.
And that’s, you know, a little bit of a frustrating experience for many people, because it feels like things are sort of stacked against you.
But, you know from… I guess from my point of view, it’s that you’ve got to a try and be aware that this can happen, so don’t get too emotionally attached, falling in love with a home before you’ve had your offer accepted and before it’s settled.
And the other thing is, is, you know, just be aware that you have to keep doing your research.
A few clients are having success with properties that may be not so popular..
And also, other clients are having success in this way… where vendors are in a situation where they don’t want lots of people coming through their house at open homes.
They may be older and it’s stressful to get ready for open homes ….
They’re a bit afraid of an auction …
Those sorts of scenarios..
And they’re uncertain.
In this situation, the property may be sold off market or not listed online.
But to get one of these, you’ve got to get in good contact with the real estate agents and make sure that they know your budget and you’re in the market.
Success buying with a letter box drop
The next thing as well is we had a client this week who was successful in buying a property, and getting it under contract on the Sunshine Coast.
They had been looking at that market for about two years.
Earlier this year they missed out a couple of times on buying a home and once again it was that same thing where you had scenarios where people from Sydney and Melbourne with much deeper pockets, you know, and much more capacity to buy, and they got outbid.
And what these people did is they did a letterbox drop in that area over a couple of suburbs.
They picked out all the homes that they are interested in, and they letterbox dropped and then they got a response from one of those recently, and they made an offer and that was successful.
So hopefully, we’re going to get there as we will get their finance approved in the next week or so.
And then they’ll move in five or six weeks time.
That was something that took a lot more work than they had anticipated upfront, but at least we got there, and they’re very, very happy to be in that position.
As there was no agent involved, it was trickier with the price and conditions negotiation… that’s where having someone like us, who can talk to you about what to do can be helpful.
First home buyers get government help to buy sooner – what programs are there and what’s new
All right now for those of you who are wanting to get into your first home and take advantage of Government grants and schemes.
We’ve had a lot of inquiry recently about that.
So the next part of this video will cover a few things that we think might be helpful if you’re in that situation or if you know someone who is.
The first thing is is we’re going to look at what governments grants / programs there are available and how they work.
First Home Loan Deposit Scheme / New Home Guarantee
One of those is from the federal government and is called the First Home Loan Deposit Scheme (if buying an established home) or the New Home Guarantee (if buying a new home or building a home).
This is an initiative by the federal government to help clients buy their first home, and to avoid paying what’s called Lenders Mortgage Insurance (LMI).
If buying an established home that has already been lived in, you can spend up to $600,000 and save on LMI under this scheme.
At 1 July, 10,000 new spots were released, and I’d expect that they would go quite quickly because they have just increased the price cap from $475,000 to $600,000 – which has definitely made it a lot more relevant for people.
And so I think you’ll find more people will jump over it so if you are keen, get in touch with me today
There are other criteria around these, like being an Australian citizen, under the cap for the income, etc.
If you are building a home or buying a brand new home, you can spend up to $650,000.
If you are looking at a budget … that can mean that you probably will be spending around early $300,000 on the land and then about the same amount on the build.
The issue with that though is, is at the moment we’re finding that there’s not really enough land for people who are wanting to build.
With these Government grants, there’s been a little bit of a surge in people who are buying and building, but the actual supply of land, and the amount of land for sale, just really hasn’t kept up with it from my point of view.
So what that means is, if you’re looking at putting some land under contract…
A lot of the land that you might be buying is not registering for a year or so.. even 15 months from now.
So what’s important about that is it’s not about what your finances are today, in terms of what you can afford borrow / spend.
Approving a home loan will be based on your financial situation when the land is registered and settling.
It’s important that you have a plan of what you’ve got to do.. like how much deposit you need, what sort of income you need.. and with your debts are there any you need to reduce or close or pay out so you are in a better financial position when your land is ready to be registered.
So a lot of conversations about this with clients.
QLD First Home Owners Grant of $15,000
If you’re building or buying a brand new home, there’s still the $15,000 First Home Owner Grant from the government of Queensland.
It’s to help people buy a brand new home or build their own home.
And that is effectively a building grant so it’s linked to the building of the property.
So it’s not when you buy the land as such, but something you can factor in when you sign a building contract, etc.
You can use he $15,000 as part of your deposit also.
Read more on the First Home Owners Grant here.
Stamp Duty Rebate
Now there’s another called the Stamp Duty Rebate, where if you’re buying an established home, you can spend up to $500,000 and you don’t pay stamp duty in Queensland.
If you buy one between $500,000 to $550,000 you pay some stamp duty, and then above $550,000 there is no rebate so you pay normal stamp duty.
One of the issues about this one is that the price cap of $500,000 hasn’t changed in a lot of years, like in ages.
But in that time, you know, you went from being able to buy a house.. it might have been a rundown house in, you know Kangaroo Point (Brisbane) and fitting under that cap of $500,000.
Where as now, you can’t buy a house in that $500,000 price range unless you go a long way out.
So although that $500,000 cap once upon a time was significant, these days a lot of people are finding that with new house prices increasing it’s not as much of a benefit as it used to be.
Read more about the QLD Stamp Duty Rebate here.
If you’d like to know more, don’t hesitate to get in touch and we hope you have a safe, July 2021.
My name is Victor Kalinowski and I’m a mortgage broker at Blackk Mortgage Brokers, with offices based in West End (Brisbane) and Burleigh Heads (Gold Coast). I help clients from all over Australia buy homes.
If you’re interested in getting in touch for some advice, book a call, instantly, at a suitable time or call 07 3122 3628.
The information contained within this page is general in nature. It serves as a guide only and does not take into account your personal financial needs. Before you act on this information you should seek independent legal and financial advice. Copyright Blackk Mortgage Brokers 2023.
