AUGUST 2022 NEWSLETTER
A WORD FROM OUR SALES MANAGER
August turned out to be a strong month for sales in our office, which was a welcome sign compared to the previous two months that were quieter after interest rates rose for the first time in years. As you are no doubt aware, the sale market is in a period of transition after having seen a significant price spike in the past 18 months. We experienced some excellent sales results on the back of low interest rates, an influx of buyers from other areas including Melbourne, lots of local movement, and frenzied investor interest - particularly from buyers agents from areas such as Melbourne, Brisbane and Sydney. Time on market was very low, competition was intense, and there was a real urgency amongst buyers that we haven’t seen for many years. It was the “perfect storm” you might say!
In addition to increased investment in the area, home occupiers were out and about, in particular first home buyers looking at both established homes and land to build, families relocating or upgrading to quality built modern homes, whilst the central Bendigo market was as strong as ever, as are properties on the outskirts of town on large land parcels. A shortage of titled land has seen land prices soar as competition for vacant land was at an all time high.
In more recent times, prices have steadied and the market has plateaued somewhat. Average days on market have increased and expectations have been tempered to meet the new reality. Interest rate rises, increased cost of living expenses, high inflation, the Federal Election, economic uncertainty, and Covid-19 are all factors that are effecting markets Australia wide, not to mention the fact the supply vs demand has flipped and the pool of buyers there once was has thinned due to the majority securing property during the boom. In summary, we are looking at transitioning back to an "average" market. What this means for Bendigo is that we are traditionally a very safe and steady market, where prices do not fluctuate too much and average time on market goes back to approx. 4-6 weeks.
Our rental team have been as busy as ever, with August producing some great results for both our rental providers and renters alike! There were 11 properties leased from a total of 193 applications and 357 enquiries, with our office vacancy rate currently sitting at 0.18%. A big congratulations to our Director and head of our Property Management department Catherine Beecroft for being nominated as one of Bendigo’s top real estate agents in a recent Herald Sun article. Well done Cat - A great achievement and one worthy of Cat’s hard work and dedication to her clients and our business!
With Spring kicking into gear and the warmer months ahead, we are expecting some busy months ahead so we hope to see you out and about!
AVAILABLE GRANTS FOR FIRST HOME BUYERS
Property Victorian Homebuyer Fund
If you're struggling to save for a home deposit, the Victorian Homebuyer Fund could be the key to owning your home sooner.
If you have a 5% deposit, the Victorian Government will contribute up to 25% of the purchase price, in exchange for an equivalent share in the property, which can reduce your mortgage. Plus, no Lenders Mortgage Insurance. For eligible Aboriginal or Torres Strait Islander homebuyers, this contribution is up to 35% and the minimum required deposit is 3.5%.
The Victorian Homebuyer Fund is a shared equity scheme, meaning that the State’s financial contribution is made in exchange for a share, or proportional interest in the property. As the value of the property changes, so too will the value of the State’s share, or interest in the property. This means the Homebuyer Fund will share in any gains in your property’s value. Participants can repay the Homebuyer Fund’s share, or interest in their property over time. Repayments can be made by refinancing, using savings, and from proceeds when the property is sold.
The property must be a standard residential property such as a house, townhouse, unit or apartment (vacant land is not eligible). The maximum purchase price must be $950,000 or less in Metropolitan Melbourne and Geelong, or $600,000 or less in other eligible regional locations. The purchase can be for an existing or new property provided that a certificate of occupancy has been issued prior to the date of the contract of sale. This means off-the-plan property purchases are not eligible.
The property must also be vacant when purchased or, if under a lease, the lease must expire within 12 months of the acquisition date and any tenants must vacate the property.
Stamp Duty Removed or Reduced
The Government can abolish stamp duty if you’re a first home buyer and buying a house for $600,000 or less.
If you’re buying a home for between $600,000 and $750,000 the Government have tapered the stamp duty. It is zero at $600,000 then increases slightly as the cost of the home increases to $750,000.
Young Victorian farmers will continue to be eligible for a stamp duty concession on the purchase of their first farm.
First Home Owner Grant
If you are buying or building a new home valued up to $750,000, you may be eligible for a First Home Owner Grant (FHOG) of $10,000.
Along with the price limit of $750,000 on the property you buy, your eligibility for the First Home Owner Grant in Vic hinges on meeting a few other conditions.
• You and anyone else you’re buying with must be at least 18 years old at the date of settlement or completion of construction, and
• You, or at least one other person you’re buying with, must be a permanent resident or Australian citizen, and
• You or your spouse, partner or co-buyer cannot previously have owned a home or received a First Home Owner Grant in Australia.
In addition, you need to live in the home for at least 12 months within a year of taking ownership of it, or within 12 months from the date of completion of construction.
You could still be eligible for the First Home Owners Grant in Vic if you and/or your spouse or partner previously owned a property but didn’t live there. This may apply to investment properties.
First Home Guarantee Scheme
The First Home Guarantee (FHBG) is part of the Home Guarantee Scheme, an Australian Government initiative to support eligible first home buyers purchase a home sooner.
It is administered by the National Housing Finance and Investment Corporation (NHFIC) on behalf of the Australian Government.
Under the FHBG, part of an eligible first home buyer’s home loan from a Participating Lender is guaranteed by NHFIC. This enables an eligible home buyers to purchase a home with as little as 5% deposit without paying Lenders Mortgage Insurance.
Any guarantee of a home loan is for up to a maximum amount of 15% of the value of the property (as assessed by your lender). This guarantee is not a cash payment or a deposit for a home loan.
Under the FHBG, 35,000 places are available to eligible first home buyers from 1 July 2022 – 30 June 2023.
To apply for the FHBG, applicants must be:
• applying as an individual or couple (married / de facto)
• an Australian citizen(s) at the time they enter the loan
• at least 18 years of age
• earning up to $125,000 for individuals or $200,000 for couples, as shown on the Notice of Assessment (issued by the Australian Taxation Office)
• intending to be owner-occupiers of the purchased property
first home buyers who have not previously owned, or had an interest in, a property in Australia
Pensioner Duty Exemption Or Concession
If you are an eligible pensioner, you may be entitled to a once-only:
• exemption from duty when you buy a home valued at $330,000 or less, or
• concession from duty when you buy a home valued from $330,001 to $750,000.
If you are buying your first home, you may also be entitled to:
• A first-home buyer duty reduction if you signed the contract for your purchase before 1 July 2017.
• The first home owner duty exemption or concession if you signed the contract for your purchase on or after 1 July 2017.
• The First Home Owner Grant regardless of the date you signed your contract.
However, you can only receive the pensioner duty exemption/concession or the duty benefits available to first home buyers in respect of the same transaction. You cannot get both. You must choose to receive one or the other. Whichever you choose, you may still be eligible for the first home owner grant if you are buying your first home.
Are you Eligible?
To receive this benefit, you must:
• Hold of one of the approved concession cards at the date of the transfer, which is the settlement date.
• Buy the property for market value.
• Intend to live in the home as your principal place of residence.
The home can be:
• An established home.
• A home bought off-the-plan, such as a house and land package where the person who sells you the land also builds the home as part of the agreed price.
• A home that is built within three years of you acquiring the vacant land.
How The Exemption Or Concession Applies
Generally, a full exemption from duty is available for homes valued up to $330,000 and a concession is available for homes valued from $330,001 to $750,000.
The way the exemption or concession is calculated varies, depending on the type of property you bought and its value. The key values for calculating the exemption or concession are:
• For established homes, the exemption or concession is based on the dutiable value of your property. This is the purchase price or the market value (whichever is greater) of the land and home.
• For off-the-plan homes, the exemption or concession is based on the:
• contract price for your property, and the
• dutiable value of your property, including the off-the-plan (OTP) concession.
You need to contact your vendor to get the dutiable value of your property, including the OTP concession. Dutiable value in this scenario is calculated using information provided by, and a method chosen by, the vendor.
• For vacant land where you are building a home within three years, the concession or exemption is based on the:
• dutiable value of the vacant land, being the purchase price or the market value (whichever is greater), and
• construction cost of the home.
How the exemption or concession applies to you also depends on the contract date and your interest in the property.
If you are eligible for the pensioner duty exemption or concession, you need the figures for the values involved in your transaction to estimate the duty you will pay.
Calculate exemption or concession
Building on vacant land
If you buy vacant land and then enter into a contract to build your home within three years, you have to pay the usual rate of duty when you buy the vacant land.
The exemption or concession will only be provided when your home is finished. Generally, this means you must pay the duty within 30 days of settlement on the land and apply for a refund if your home is constructed within three-years of buying the land. You have five years from the date the duty was paid to apply for a refund.
Buying a share in a property
If you are an eligible pensioner and buy a share (also known as a fractional interest) in a property rather than the whole property, the pensioner exemption or concession will be assessed on the value of your share. You must still meet all the requirements to receive the exemption or concession and must not have previously received a pensioner exemption or concession, rebate or refund of duty in respect of a previous transfer.
The duty you pay on the transfer of the property is the total of whatever duty, if any, that applies to all the purchasers
AUGUST BIRTHDAYS
AUGUST ANNIVERSARIES
BUYING IN BENDIGO EVENT
A big thanks to Jess Brawn, Matthew Hammond and the rest of the team from the Bendigo Bank for organising such as informative event. The night was a huge success with a great turnout - a lot of value to those that attended on the night!
RENTAL TEAM
