With the increased cost of living, it’s difficult for young adults to save the deposit for a first home purchase. Regional first home buyers get a reprieve on stamp duty, if eligible for the concession (if home is valued under $800,000). Potentially, they could also get a Federal first home-owners grant of $30,000, if arranging building of their first home. However, there is still lender’s mortgage insurance if borrowing past 80% and other buying costs.
Antonia Mercolla of REIQ recently highlighted the challenges first home buyers face in Queensland, particularly the deposit. “In Queensland, a 20% home deposit for a first home now represents 1.64 times the average annual earnings,” she said. So how do young people now buy a home that’s affordable?
Idea: A Regional Home = a Smaller Deposit
But hold on there, there is hope. While buying a house in Brisbane now costs a median of $1.15 m, if you buy a unit or house in the Caboolture region, it’s likely to be more within reach – along with a lower deposit. Even better, across the Moreton Bay LGA, the October quarterly median Unit sales price was $540,000.
Buying a unit at the median sales price of $376,000 in Caboolture (end 2024) would see the new buyer needing $75,200 (20% deposit), avoiding the LMI cost and getting a great start on building equity. It’s always better to borrow less if possible, so you pay much less interest over time.
Another reason to buy at a lower level: The Queensland first home transfer duty concession applies to a home valued under $800,000, saving the buyer up to $24,000.
A current 3-bedroom median house in Caboolture is $710,000. Depending on your deposit amount, you might have to pay a small amount of LMI. (LMI is an insurance policy that protects a lender from any loss it may incur if a borrower defaults on their home loan.)*
Benefits of Buying Caboolture Region Real Estate
Another benefit of this area is the huge variety of housing at all different price points. You can choose between a 3-bedroom home built in the 1960s or a modern 2-bedroom unit with the latest kitchen fittings and air con – and everything in between.
Plus, living further out of the city generally means easy access to schools (sometimes in walking distance), access to main highways, little traffic, and more parks, which are all things to look out for when buying in the Morayfield or Caboolture region. There are also good train lines and buses servicing the area.
These elements are also what tenants look for, so that’s something to consider if you want to rent out the unit or house (while minding the rules of any grant or concession). In Caboolture, houses rent out for an average of $575 per week, with an annual rental yield of 4.6% and units rent for average of $420 per week, with a rental yield of 5.4%. (Prices to October 2024).
Of course, before you make the decision to purchase or invest, it’s important to come to the area and talk to a real estate agent who’s lived and worked in the area for a long time. So, speak to Current Real Estate, longstanding agents who can give you a fair idea of what kind of homes you would get for your money, and the better streets to buy in.
Find out what’s on the market in Caboolture and Morayfield area today.
*YourMortgage.com.au; Realestate.com.au, https://www.domain.com.au/afford-to-buy/