With fresh policy proposals hitting the headlines, housing affordability remains a hot topic. Recent announcements from both the Federal and Victorian governments aim to increase housing supply, but what does this mean for first home buyers?
Victoria’s Stamp Duty Concession: A Game-Changer for Unit Buyers
One of the most immediate benefits for first home buyers is Victoria’s new stamp duty concession for off-the-plan townhouse and unit purchases, applicable to any value and any buyer. This uncapped 12-month concession is a golden opportunity to enter the market with lower upfront costs. Historically, similar concessions have sparked a surge in activity, and it’s likely this policy will encourage many first home buyers to reconsider units as an affordable option.
However, the question remains: Are units the best long-term wealth-building asset? Data suggests that unit values in areas like inner Melbourne have underperformed, with some still below their 2017 peaks. First home buyers will need to balance short-term affordability with long-term investment potential.
High-Rise Living: Is It Right for You?
Another significant change is the Victorian Government’s push for high-rise developments near metro hubs. While this will create more supply, the reality is that high-density living isn’t for everyone, especially families looking for space to grow. According to the 2021 census, only 1.7% of one-family households live in units in high-rise blocks. For those seeking a family home, detached houses in suburban areas remain the preferred choice.
However, units can be a great downsizing option for empty nesters, which could open up more family homes for first-time buyers. With a significant price gap between houses and units—around $313,500 in Melbourne as of September 2024—units are becoming an attractive choice for younger Australians looking to enter the market.
TMAP’s Solution: The TMAP2Step Strategy
For those who feel priced out of the market where they want to live, now is the perfect time to consider alternative strategies. TMAP’s TMAP2Step offers a smart way for first home buyers to get their foot in the door. The strategy involves purchasing a more affordable property in a growing area and using the equity gained to eventually buy where you want to live. This approach allows you to start building wealth sooner, even if it means delaying the purchase of your “forever home.”
Victoria’s stamp duty concession, combined with the potential for growth in new high-rise developments, creates an enticing opportunity to use the TMAP2Step in your property journey.
What Next?
With governments focusing on increasing housing supply, first home buyers have more options and incentives. But as always, it’s important to assess long-term potential and consider strategies like the TMAP2Step to maximise your investment. Whether you’re looking at units or detached houses, the key is to act now while conditions are in your favour.
