Your First Home is Your First Investment

 

4 June, 2020 – Dec 31, 2020

If you look back through history, one of the best things many of our parents, grandparents and great-grandparents did, was to buy their first home and pay it off. 

Fortunately for many current retirees, they purchased property in locations that were, at the time, affordable but not necessarily in a scarce location. Many purchased properties close to the water or the city. As the population increased, these properties became harder and harder to find and as a result, became much more desirable. Fast forward 30-40 years and that property has gone from being an outer lying suburb to an inner city, infill suburb in high demand. That pressure is one of the biggest causes of capital growth and is the factor we call ‘scarcity’. 

 

Another point is when they bought the property 40 years ago, they may have bought it for $40,000. When they’re ready to retire, their $40,000 property is now worth $500,000 – $1,000,000. Usually their option is to then sell their home and downsize and retire on any extra equity. 


The purpose of investing is to buy things that increase in value. You could relate to your house being an investment, simply because while you are living in it, it is still increasing in value. For people entering the market, they should always look at the home that they are buying as one of their investments because the market will move upward in time, provided they bought in the right area (high population growth area), at the right time. If you look at the underlying theme, the equity that you gain in your home is still like cash in the bank, just stored in the property you live. 

 

The advantage right now for people entering the market looking to buy their first home, is that property prices in Mackay and Townsville and as much as Central Queensland are comparatively at record lows. That is, you can buy properties now, much cheaper than you could 5 to 10 years ago. So, you are buying at the bottom of a market. You’re also buying with record low interest rates. The cost of buying and ownership are exceptionally low. 

Add to this the current stimulus available for homeowners that are wanting to build. As the construction industry took a small hit due to COVID-19, the Federal Government has announced a HomeBuilder Grant of $25,000 for eligible Australians planning to build or renovate between June and December 2020. The grant is eligible for first and second homeowners. In QLD, the First Home Owner Grant of $15,000 can be used with this as well.  

 

The Government have decided to extend the HomeBuilder Grant program until March 31st, 2021. 

 

However, if you enter a build contract between Janurary 1st 2021 and March 31st 2021, you will only qualify for $15,000, instead of the original $25,000. 

 

The construction commencement timeframe has also been extended to 6 months to cater for busy builders and the Christmas holiday period. This is backdated and applies to all contracts entered into on or after the 4th of June, 2020. 

 

You can read more about this here: https://treasury.gov.au/coronavirus/homebuilder

 

Oz Property Investment Centre also have up to $20,000 of other incentives available on selected locations and properties.  
You may never ever get a better time to purchase a house with so little of your own money in as you will get right now. These markets are expected to turn, and we are expecting upward pressure on prices over the next couple of years. Buying your home now would mean you are capitalising on multiple opportunities at once. 

Pages: 1 2