Geelong’s property market presents a significant challenge for first-home buyers, with a typical home deposit now averaging a staggering $104,000. However, recent analysis reveals that savvy buyers can enter the market with much lower upfront costs, particularly by leveraging government incentives and targeting specific areas within the city.
The First Home Guarantee, a federal initiative, allows eligible first-home buyers to secure properties with as little as $20,000 in initial costs. This program enables buyers to avoid the significant expense of lenders mortgage insurance, which can add thousands to the overall purchase price. According to data from MCG Quantity Surveyors, those willing to explore less expensive suburbs can find opportunities to buy units for as little as $17,000 upfront.
Despite the average deposit required for a typical home, first-time buyers can reduce their financial burden in suburbs such as Herne Hill, Geelong West, and Whittington. For instance, the up-front cost for a unit in Herne Hill could amount to $17,000 with a 5% deposit and the government’s backing. In contrast, purchasing a home in more sought-after areas can escalate costs significantly.
Tony Slack, a buyers advocate in Geelong, noted a noticeable shift in preferences among first-time buyers toward townhouses in established suburbs. He explained, “We’ve had three interest rate cuts in the past few months. I think buyers realize that the market is not going to get more affordable.” This shift is indicative of changing dynamics as buyers seek properties that offer proximity to amenities while remaining affordable.
In terms of specific financial figures, first-home buyers targeting units in Geelong are finding that the median price of units is considerably lower than that of houses, making it more feasible to enter the market. For example, units in Norlane and Corio are priced at $393,000 and $495,000, respectively, with corresponding upfront costs significantly lower than those for houses.
The competitive landscape of the Geelong property market is evident in the rising demand for regional properties. Data from realestate.com.au indicates a 125% increase in demand for units in Belmont and an 88% increase in Newcomb over the past year. This heightened interest suggests a robust market for first-home buyers, particularly as they navigate the complexities of securing financing and deposits.
Furthermore, GSE Finance partner Matt Turner highlighted the benefits of the First Home Guarantee, noting that it not only facilitates access to more affordable financing but also alleviates the burden of lenders mortgage insurance, which can range from $10,000 to $50,000. This allows buyers to maximize their purchasing power while minimizing upfront expenses.
Despite these opportunities, challenges remain. Mike Mortlock, director of MCG Quantity Surveyors, pointed out that the high cost of living is making it increasingly difficult for potential buyers to save up for deposits. “Most people are spending their salaries to cover their living expenses. To start really building up their savings, they would need a significant pay rise,” he stated.
Mortlock further emphasized that without substantial increases in housing supply, the situation for first-time buyers is unlikely to improve. He remarked, “Prices are just going up so much faster than wages,” indicating a persistent trend that could hinder future buyers from entering the market.
In light of these developments, first-home buyers in Geelong are faced with a complex landscape. While government programs like the First Home Guarantee provide a pathway to homeownership, the ever-increasing property prices and living costs present ongoing challenges. As the market evolves, prospective buyers will need to remain agile, exploring various options to secure their first home in this competitive environment.
