Buying a house in Victoria

Supporting people to buy their own  home

Buying your own home is the Great Australian Dream. But for some, especially first home buyers, younger and lower income households, that’s getting harder.

Many potential home owners are being locked out of the market by growing competition and the upfront costs associated with purchasing a home – the need for a deposit, stamp duty payments and other fees. This means owning a home is increasingly becoming a distant dream for many Victorians.

Recent data shows the problem is growing. Median house prices in Melbourne have risen by over 40% since 2012. Metropolitan Melbourne house prices have risen to $610,000 and unit prices to $490,000 for the June Quarter 2016. Melbourne continues to have the highest home prices after Sydney.

From 2005 to 2015, the median sale price of housing across regional Victoria increased 49%, from $206,000 to $307,500. At the same time unit prices in regional Victoria rose 32%, from $190,000 to $251,000.

These increases are having a real impact on the ability of Victorians to buy a home. From 1994-95 to 2013-14, home ownership rates dropped from 76% to 69% of Victorian households.

The price growth is having the biggest impact on our young, with the decline in home ownership rates steepest among Victorians aged 25 to 34.

It’s not surprising, given that first home buyers are also competing with those buying investment properties. The Commonwealth Government’s tax policies make it even harder, with negative gearing and capital gains tax rules benefiting investors over home buyers.

Homes for Victorians aims to shift some of the balance back to first home buyers.

Abolish stamp duty for first home buyers for purchases up to $600,000 and taper the rate for purchases between $600,000 and $750,000

 

Establish HomesVic, a new shared equity scheme to help first home purchasers who are eligible for a bank loan but need help with a deposit

 

Balance the market between investors and home buyers by making the ’off the plan stamp duty concession’ fairer and introducing a land tax on vacant residential properties