The number of first home buyers in the Brisbane market has been increasing all year and it’s likely to strengthen further in coming months.
One of the reasons is the First Home Loan Deposit Scheme, which kicks off on 1 January 2020 and will enable first-timers to buy with a deposit as low as five per cent.
The scheme will see the Federal Government pay Lenders Mortgage Insurance for deposits lower than 20 per cent, which will save first home buyers thousands of dollars.
However, the scheme is limited to 10,000 borrowers so first home buyers will need to move quickly to make the most of it.
It also has income and location-dependent property price caps. In Brisbane, that magic number is $475,000.
Many prospective buyers will now be considering what and where to buy under that figure.
There are pros and cons of buying a house or a unit or townhouses, which I have helpfully outlined for you below.
I have also analysed which suburbs may be the best to consider to ensure that you keep the purchase price under the scheme’s price cap.
Houses
Suburbs to consider for houses are Zillmere, Bald Hills, Deagon, Lota, Moorooka, Banyo, Tingalpa, Boondall, Forest Lakes Fitzgibbon, Acacia Ridge and Brighton.
Benefits
- Strong land to asset value ratio
- No body corporate fees
- Houses gave outperformed units and townhouses
Negatives
- Have to buy further from the city to keep it affordable
- Longer commuting times
- Given the median house price in Brisbane is about $650,000, buying a house for under $475,000 may mean issues such as flooding or being near a major road
Townhouses
Suburbs to consider for townhouses are Annerley, Carina, Auchenflower, Keperra, Coorparoo, Carseldine, Yeerongpilly, Moorooka, Taringa, Sunnybank, Calamvale and Toowong.
Positives
- Closer to the CBD
- Three bedrooms fit a lot of demographics of renters and future buyers
- Stronger land value component than units
Negatives
- Body corporate fees
- Very similar – not much scarcity or uniqueness
- Can lack owner-occupier appeal
Units
Suburbs to consider for units are South Bank, Hamilton, Morningside, Woolloongabba, Kangaroo Point, St Lucia, Taringa, Newmarket, Brisbane City, West End, Albion and New Farm.
Positives
- The $475,000 price cap can buy a unit in most suburbs in Brisbane
- Good market depth – sinks, dinks and downsizers
- Buying bottom of the market
Negatives
- Least land value component
- Body corporate fees
- Can be prone to oversupply
