With the price of the average Australian home over one million dollars in capital cities, it’s no surprise to hear that it is harder than ever for first-home buyers to jump on the property ladder. Jack Petzke recently bought his first home on the Gold Coast.
He wasn’t eligible for the First Home Owner’s Grant [FHOG]. But the engineering consultant found a lesser-known scheme that helped him secure the property.
“It’s not commonly known, which I’m shocked about, because it’s such a good scheme,” Jack told Yahoo News Australia.
The First Home Super Saver Scheme [FHSSS] was first introduced in July 2017 to help new buyers save for a deposit through their superannuation.
Voluntary contributions can be withdrawn when it’s time to put down the deposit, without impacting super.
For Jack, 28, and his fiancée Alyshia, their road to homeownership wasn’t a straightforward one.
Jack said they “struggled from the get-go” to find a house in the competitive market, with many homes selling for a lot higher than listed.
Because Alyshia already owned a property with her brother, she wasn’t eligible for the FHOG, which meant that Jack, as her spouse, wasn’t eligible either.
“We didn’t have any support from government or family. It was entirely up to us to get the 20 per cent deposit together,” Jack said.
Through the Super Saver Scheme, Jack saved for three years to grow his deposit, while Alyshia sold her share of the property she owned to her brother’s partner.
Finally, with their deposit ready to go, they found a property they loved in Oxenford and moved in during October.
How does the Super Saver scheme work?
The First Home Super Saver scheme allows aspiring first-home buyers to boost their deposit by saving through their superannuation, where contributions are taxed at a lower rate than ordinary income.
Individuals can contribute up to $15,000 a year and $50,000 in total, then withdraw most of those funds — plus earnings — when purchasing a home in Australia.
The tax concessions mean savings can grow faster than in a standard bank account.
Buyers must apply to the tax office to release the funds before the property officially transfers into their name.
“It was a good way for me to really use that super account as a savings account, benefit from paying less tax on the savings, and then withdraw those funds to use it for a house deposit,” Jack said.
“It really forced me to save for the house, in a way that I couldn’t dip into.”
Saving for your first home is tougher than ever for young Australians. Source: Getty
(Getty Images/iStockphoto)Rate rise forces buyers to be more ‘cautious’ of spending
On Tuesday, the RBA raised the cash rate by 25 basis points, making it the first rise since November 2023.
The increase will lift mortgage repayments by about $100 per month for the average Aussie homeowner.
Jack and Alyshia are getting married in May, giving them even more reason to budget.
“We’re just going to be a little bit more cautious of our spending,” Jack said.
“Even though it’s only going to be a little bit extra each month, it still makes all the difference that we’re going to have to check our budgets, and we’re going to have to be a little bit tighter and make sure that this won’t affect the wedding because there’s the possibility that it could.”
The couple’s mortgage broker, Lauren Hall from Loan Market, said the recent rate rise will mainly impact lenders in two ways: stricter borrowing capacity and higher repayments.
“If someone’s earning $100,000, $105,000, the borrowing capacity might reduce by $10,000 to $15,000, depending on the bank, with a 0.25 rate increase.
“So it’s not drastic. But, again, every little bit helps,” Hall said.
For the average mortgage, sitting just under $700,000, the rate rise will make a difference of just over $100 a month, she said.
“It’s not significant, but I suppose if it’s a sign of more rate increases, that’s going to compound, that’s going to start to have more of an impact.”
Despite uncertainty around interest rates, Hall said first home buyers shouldn’t be afraid to enter the real estate market.
“I’ve always believed that the sooner you get into the property market, the better,” she said.
“But we want to be doing so, making sure that we’re working out the numbers. We want to make responsible decisions.”
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