Housing Crisis vs First Home Buyers – the changing landscape of entering the Property Market
The Queensland Government has unveiled a transformative initiative to tackle the state's housing crisis and pave the way for sustainable growth. The "Homes for Queenslanders" strategy is a bold step forward, focusing on increasing housing supply, improving affordability, and fostering thriving communities.
A Priority Development Area in Southern Thornlands
On April 4th, 2025, the Queensland Government declared Southern Thornlands a Priority Development Area (PDA), unlocking land for up to 8,000 new homes. This ambitious project spans 890 hectares and aims to provide housing and infrastructure for approximately 20,000 residents. The PDA designation streamlines planning processes, reducing bureaucratic hurdles and enabling faster delivery of homes.
Diverse Housing Options
The first phase of development will release approximately 900 homes, with up to 20% allocated to social and affordable housing. The strategy supports a broad mix of housing types, including townhouses, detached homes, and apartments, catering to the diverse needs of Queenslanders. This approach ensures that everyone, from first-time buyers to families, has access to suitable housing options.
Infrastructure and Community Development
The Southern Thornlands PDA is designed to integrate residential communities with essential infrastructure. The master plan includes parklands, local shopping precincts, educational facilities, and public transport networks. Environmental considerations, such as wildlife corridors and sustainable stormwater systems, are also prioritised.
Financial Support for First Home Buyers
In addition to the housing strategy, updated lender policies are now available to help first home buyers enter the market more easily. These policies reduce or eliminate the need for lenders mortgage insurance, saving buyers thousands in interest charges on their home loans. This financial relief is a game-changer for many aspiring homeowners.
As Mortgage Brokers, we hate to say ‘NO’ to potential first home buyers because they don’t have enough deposit.
The journey to homeownership has become an uphill battle for many first-home buyers in Queensland, particularly for those who find themselves caught in the middle: earning too much to qualify for government schemes, yet unable to save a sufficient deposit due to the escalating rental crisis. Add to that the fact that many properties are over the price cap to be eligible for the scheme, and you have many frustrated potential first home owners. It’s a difficult reality where earning a decent income does not necessarily translate to homeownership, especially in a housing market as competitive as Queensland's.
The Impact of Rising Costs
As rental prices soar, so too do property prices, pushing the dream of homeownership further out of reach. For those unable to save a 20% deposit, additional costs like Lenders Mortgage Insurance (LMI) add further barriers. Although recent updates to lender policies have introduced measures to reduce or eliminate LMI for some buyers, these options may not yet fully cater to those who fall just outside eligibility for government or financial support schemes.
Tailored Lending Policies
At The Mortgage PA we help borrowers explore possible lending solutions not previously available. Innovative lending solutions are emerging as a beacon of hope for first home buyers who find themselves excluded from government schemes due to income thresholds or property price caps. These solutions aim to bridge the gap and provide alternative pathways to homeownership.
Some lenders are introducing policies that reduce or eliminate the need for Lenders Mortgage Insurance (LMI). This approach is particularly beneficial for buyers who can't rely on family support but still need assistance to secure a home loan.
Adjusted Lending Buffers
There is ongoing discussion about revising the serviceability buffer, which currently requires borrowers to prove they can afford repayments at an interest rate 3% higher than the current rate. Lowering this buffer could make loans more accessible without compromising financial security.
Shared Equity Programs
Shared equity schemes, like the expanded "Help to Buy" program, enable buyers to purchase homes with lower deposits by sharing ownership with the government or private entities. While these programs have limitations, such as shared capital gains, they provide an option for buyers struggling to save a full deposit.
Rent-to-Buy Schemes
Innovative rent-to-buy models are gaining traction, allowing renters to gradually transition into homeownership. These schemes often involve a portion of rent being allocated toward the eventual purchase of the property, making it easier for renters to build equity over time.
These solutions reflect a growing recognition of the challenges faced by first home buyers and the need for creative approaches to address housing affordability. What do you think about these initiatives? Could they be the key to unlocking homeownership for you? Make an appointment with us to explore your home buying options – You may be closer to buying your first home than you thought…..
