5% deposit scheme buyers build equity
If you're a first home buyer considering entering the property market, new figures offer an encouraging sign: many buyers who purchased through the government's 5% Deposit Scheme are already building equity despite moderating property values.
Almost 48,000 properties have been purchased through the scheme since it expanded last October, yet PropTrack estimates that fewer than 0.2% of those buyers are in negative equity. In fact, 52% now have more than 5% equity in their property.
That’s because more affordable properties have generally outperformed higher-priced homes over this period, helping many first home buyers build equity even as the broader market has declined.
That's encouraging whether you're planning to use the scheme or buy independently. Eligible buyers can enter the Sydney property market with a 5% deposit without paying lender's mortgage insurance. More broadly, the figures show that falling property values don't necessarily prevent first home buyers from building equity after stepping into home ownership.
About the author – Alex Veljancevski is a Sydney Mortgage Broker with Eventus Financial, which assists first home buyers, investors, upgraders and borrowers seeking to refinance to a better deal on their home loan.
