FIRST home buyers Hafsah and Rahman Mahmoud are relieved they bought in late 2021.
Interest rates were still at record lows and, unable to travel overseas, the couple were able to use their honeymoon budget to boost their deposit.
“With one dream on hold due to travel restrictions, we decided to focus on another, agreeing to use our honeymoon savings to kickstart our property journey and buy our first home,” Mr Mahmoud said.
“We began to look at ways to increase our deposit, starting with creating a budget to live as economically as possible and moving back into my childhood home.
“While we were saving, we were also busy researching to find the right place to start our new lives.”
Newlyweds, Hafsah, 24, and Rahman Mahmoud, 23, at their new home in Everleigh. ProMedia Photography by Paul A. Broben
The couple moved in to their new four bedroom home at Mirvac’s Everleigh estate at Greenbank in December – four months before the first interest rate hike in May.
In May, the Reserve Bank of Australia (RBA) lifted the official cash rate from a record low 0.1% to 0.35%.
And from there, the pain for mortgage holders and hopeful buyers only compounded, with consecutive monthly increases of 0.5% cent taking the cash rate to 2.35% last month.
Another 0.5% rate hike is expected on Tuesday.
Borrowing capacity since April. PropTrack
“For now we are comfortable as we fixed our rate for 12 months,” Ms Mahmoud said, before adding that others were not so lucky.
“We have friends who had to change builders as the cost of construction increased.
“And another friend, she is struggling to find anything in her price range on a single income.
“We are very lucky.”
Mrs Mahmoud said they made the most of the various grants available to first home buyers, with the entire process from buying land to construction coming in at around $470,000.
“We really wanted to stay under $500,000 to meet the threshholds for the grants,” she said.
“But given the borrowing power now, if we hadn’t bought when we did, I am not sure we would be able to do it now.
“If we were even just a few months later, we might not be in our own home.”
Newlyweds, Hafsah, 24, and Rahman Mahmoud, 23, at the Everleigh estate by Mirvac. ProMedia Photography by Paul A. Broben
Buyers with a maximum borrowing capacity of $500,000 in April, before the first rate hike, are now facing the prospect of trying to find a home with a budget of around $400,000.
That borrowing capacity will shrink to $382,699 if another 0.5 per cent hike to the official cash rate happens on Tuesday.
Mirvac’s Everleigh masterplanned community in Greenbank.
Mirvac Residential Queensland general manager Warwick Bible said first-time buyers had led the charge in purchasing land at Everleigh since Covid-19.
He said that more than 45 per cent of buyers in the most recent land release, which sold via a ballot system due to high demand, were first home buyers.
“Communities like Everleigh are appealing to purchasers who are looking for a relatively affordable entry to the market, within commuting distance of employment hubs in Springfield, Brisbane and the Gold Coast, with land prices starting from $281,000 in our most recent release,” he said.
More than 100 lots have already sold at Everleigh this year, with Mirvac forced to introduce a ballot system for its last four land releases due to its growing waitlist.
Originally published at Sydney News HQ
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