First Home Buyers - BUILDING VS BUYING In Tasmania
If you are a First Home Buyer, you may already be painfully aware that in Tasmania, House prices are on the rise.
Just this year, the number of sales in the Greater Hobart area have gone up by 8.2 percent. Launceston are up by a whopping 29.6 percent and the North West Coast is up by 13.8 percent.
Property owners selling their homes and buying elsewhere couldn’t be happier!
Many have had multiple buyers at their open homes with multiple contracts.
Interstate buyers (that have made up to 22% of the purchases so far) have been buying up property “sight unseen” before anyone gets a sniff.
For those that already have a house, put your hands in the air and do a little dance! Property Investors rejoice!
Cheers To You!
But for those NOT in the market, (I’m talking about YOU First Home Buyers) the news is a little grim.
Actually it sucks.
Prices have gone up and are still rising.
FHB’s are being frustrated by the competition. Outbidded and outgunned by other buyers in stronger financial positions. Thank your lucky stars you aren’t trying to buy in Sydney right now.
The problem is: Higher Prices mean Higher Deposits are required.
To get a Home Loan, as a MINIMUM, your deposit/savings will need to be just over 10% of the House Price. Otherwise you have no hope of covering the property transfer duty, legal fees and bank fees involved. Let alone meeting the deposit required by the bank.
So is there a cheaper way to be getting into the market for a First Home Buyer?
Yep! The secret is Vacant Land. In many areas the Land prices haven’t increased like house prices.
It’s Time To Consider Building a House Instead Of Buying A House.
You May Be Looking In The Wrong Place
Before you say “building is too hard” and “what about the council?” and “building sounds complicated”. Ask yourself if you would like to save around $30,000 for nothing.
Because that is about how much you could save if you build as a FHB in TAS.
Until the 30th of June 2018, FHB’s in Tas are eligible to receive the First Home Owners Grant (FHOG) of $20,000. That’s not a trick. It goes towards the first part of your build. It won’t be around forever. Take the money!
Aside from the FHOG there’s another big saving to be had. Transfer Duty. Huge pointer!
You only pay Property Transfer Duty on the value of the LAND if you are buying vacant land.
PERSPECTIVE: If you buy a house for $350,000 in TAS, transfer duty will cost you $11,935.
BUT if you buy a block of land for $120,000, then transfer duty is only $3,135. The difference is $8,800.
Play with the transfer duty calculator yourself by clicking HERE
With the Transfer Duty savings and the $20K FHOG, you’re now almost $30K in front.
You didnt have to put up so much savings for the home loan after all.
Plus you have a brand new house as a First Home Buyer that you’ve had some say in designing. Nothing to renovate or do up.
So how do you pull it all together? Glad you asked. Because this is our Forte.
If you need more Nitty Gritty, call us on 03 6244 4646 or Contact us HERE
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