Property Market Keeping You Up at Night?

Post : February 2, 2022

Can't sleep because you're worried about entering the property market at the right time? Don't stress too much; we'll help you figure it out. Knowing that we understand you if you are also going through Fear Of Missing Out (FOMO).  

armchair at house 2021 08 27 23 55 59 utc 300x200 - Property Market Keeping You Up at Night?As for most Australians, the housing market entrance has been really challenging. But 91% of the first-time homebuyers last year say their key concern was housing affordability, which has become even more concerning during the pandemic. 

The buyers who have FOMO are speculating the right time to enter the market. Though it's not wise, there's an urgency related to buying. Buyers try to make use of limited-time assistance schemes or lower rental rates. 

Every buyer feels indecisive about the time to purchase the property. You might be discouraged when you see price skyrocketing and moving further away from your savings for the first deposit. 

Relax! We've got some amazing tips for you. 

Well, the financial struggle is real. But there are tons of financial benefits for you to get started. If you shape your future today, you can avoid tomorrow's difficulties. 

Below are some tips to help you get rid of FOMO, and don't forget to talk to experts at Afiyah Financial Services if you need assistance. 

First Time Home Buyers — Here Are Some Government Incentives 

If you've been wondering how to get onto the ladder and move up as fast as you can, check out the government incentives. There are several incentives to help first time home buyers. We'll mention them below, so stay on the lookout for them: 

First Home Super Saver Scheme

In the 2021-2022 budget, the Government increased the fund limit for First Home Super Saver Scheme up to $50,000 from $30,000. First-time homebuyers can deposit their super accounts to withdraw later when purchasing owner-owned homes. Buyers can voluntarily make both non-concessiona

keys and toy house on green background rent house 2021 09 02 07 53 34 utc 300x199 - Property Market Keeping You Up at Night?

l and concessional contributions to their super funds. They can withdraw this to deposit their first home whenever they purchase it. 

First Home Owner Grant

This grant has nationwide iterations for helping homebuyers to create their deposits. The grant size will be based on the territories and states, and it's not available in the ACT now, and it is between $10,000-20,000 in the states. Though this is not enough to cover the deposit amount in most locations, it still can be a great incentive. 

Like every other government scheme, this has several criteria that an applicant must adhere to. This may vary for the state, but there are some common ones. 

  • You should be a permanent resident or an Australian, also a first-time homebuyer. 
  • You should be aged 18 or above. 
  • The property should be newly built. 
  • You'll be eligible for the grant only if you meet the given price cap. In other words, there's a price threshold. 
  • The property should be your main residence for a certain period of time. 

First Home Loan Deposit Scheme (FHLDS)

This is one of the incentives provided by the Government to speed up the process for first-time home buyers. This allows eligible home buyers to use their low deposit to purchase a home. If you are a qualified buyer, you will need around 5% - 20% of the property price. You will have to handle the Lenders Mortgage Insurance (LMI).

The eligibility criteria have income requirements as below: 

  • $125,000/yearly should be your taxable income, and it shouldn't increase if you are single.
  • $200,000/yearly should be the pooled taxable income for couples. 

Like most schemes, FHLDS applies only to owner-occupiers, and property investors can't benefit from this.

Stamp Duty or Transfer Duty Concessions

These are the immediate yet largest costs you are likely to bear even on your 5th property purchase. Unless you get concessions or are exempted, you'll be charged for the purchases you make. The following factors affect stamp duty charges: 

  • Property location 
  • Sale cost/property value 
  • Property type (house, apartment, investment property, owner-occupied) 
  • A first time home buyer 
  • A foreign buyer 

Some states offer concessions or exempt stamp duty for first-time home buyers. These concessions are different for different territories and states. However, there's a cap price for them. 

Now is the Right Time — Should You or Should You Not Enter the Market? 

You will never find the "perfect" time to enter the market and buy your first home. It depends on your situation and financial means. If you think you can handle purchasing a home at this time, it's time to speak to a specialist to discuss the end steps in purchasing your home in an Islamic manner. As for the studies, even though pandemic has impacted buyers' sentiments, the Aussie confidence about the market has been unwavering.  

Anyway, we'll share some tips to move up the property ladder: 

  • Rent-vesting strategy 

This might be a good investment strategy if you're renting in an unaffordable but great property. This means you have to buy a rental property that you can afford but continue living and renting in the preferred location. 

You'll receive many tax advantages for the investment property while receiving rental income. Also, if the value of the property increase with time, you will be able to send it for a profit and buy a property in a preferred location. Or consider property's equity if you want to make a deposit. 

  • Use a Suburb Spotter tool

The amazing thing about being a property buyer is that you have to dig deeper to find a property you can afford. After you've got a hold of a region or suburb, you'll be able to settle for an affordable property. This will help you narrow down your search. If you are genuinely interested in the property market, you can do two things:

  1. Use the Suburb Spotter tool.  
  2. Seek help from a property manager. 

The tool will help you find the areas that you can afford. It's possible to filter your choices as for the deposit size, house, and units. 

  • Talk to Afiyah!

It'll be overwhelming to purchase your first home Islamically. But if you have the right person to help you throughout the process, you'll be able to relax. This is why it's important to talk to you a specialist to seek guidance. 

At Afiyah, the team have the experience to break down complex concepts into simpler concepts, which will definitely be important in the property market. Even if you are not ready to purchase yet, you will still find help invaluable when experiencing FOMO. 

Are you finding it hard to purchase a home in a way that aligns with Islamic values?
At Afiyah we make Islamic finance simple and easy.
We walk you through the steps of owning your first home or first investment property in a way that will align with your values and provide you with peace of mind.

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