The Australian property market has long been a challenging space for first home buyers, with skyrocketing property prices making it difficult to enter the market — but that’s not to say there aren’t opportunities to be found.
A number of recent government initiatives have made it easier for Australians to take their first steps into property ownership. One such initiative is the First Home Buyer Choice in NSW, which enables buyers to pay a smaller annual property tax instead of a large upfront stamp duty. This initiative has made it more attainable for Australians to purchase their first homes in various regions of NSW, including Tamworth, Wagga Wagga, the Central Coast, Coffs Harbour, and the Western and South Western suburbs of Sydney.
According to Arjun Paliwal, founder and head of research at InvestorKit, the First Home Buyer Choice in NSW has been well thought out and is set up for success.
He explains that this reform brings forward the time it takes to save for a deposit and makes it possible for Australians to get their foot on the property ladder sooner — thanks to its $1.5 million price cap and ability to be used across the state.
According to Mr Paliwal, it represents a huge opportunity for those purchasing their first property.
So, where can first-time buyers make the best use of the scheme? For those who are looking to achieve capital growth from their purchase, the founder has flagged five regions worth looking at:
Paliwal identifies Tamworth as one of the most attractive regions in NSW for first home buyers. A short flight away from both Sydney and Brisbane, Tamworth makes for an affordable and convenient location for those seeking a relaxed and idyllic lifestyle.
The area has a median house price of $469,000, and major amenities include a large healthcare facility and New England University. Mr Paliwal highlighted that Tamworth has recently achieved price growth of 18.3 per cent, due to an undersupplied pipeline of future builds and low numbers of houses for sale and rent, making it a standout area.
The regional hub also has approximately $3.8 billion worth of infrastructure projects in the pipeline, which will result in job creation, increased demand for housing, and a revitalisation of the area.
- Central Coast
Paliwal also identifies the Central Coast as a promising area for first home buyers. Just over an hour’s drive from Sydney, it’s an easy sell for commuters, while recent and earmarked transport improvements are continuing to make the Central Coast a ‘part’ of Sydney rather than its own region.
While the median house price is over $900,000, Mr Paliwal acknowledged that the price caps of the new legislation mean plenty of suburbs across the region will get you a house with yard space, as opposed to a small apartment in Bondi.
- Wagga Wagga
Another promising area is Wagga Wagga, the largest inland city in NSW.
In 2022, the city experienced some of the highest house price growth in the country, at 20.5 per cent. However, Mr Paliwal sees property as still remaining affordable, thanks to a median house price of $500,000.
According to the buyer’s agent, even if first home buyers purchase now and decide to relocate and use the property as an investment down the track, they can expect very attractive capital growth. He also added that the tight rental market in the region, which sits below 0.5 per cent, will result in strong returns for investors who contribute to adding stock to the rental market during this time.
- Coffs Harbour
Coffs Harbour is also a top-performing region for first home buyers, with a median house price of $720,000. Noting that this region has seen price growth of 21.8 per cent in the past year, the researcher has attributed this to tight for-sale supply, fast-dropping days on market, and very low vendor discounts.
In the longer term, Mr Paliwal said that he expects the coastal area to continue to remain strong thanks to first home buyers “wanting the seaside location without the Byron Bay price tags.”
“With a median house price of $815,000, Coffs Harbour provides home owners a well-priced lifestyle, and in recent years, the local foodie scene has also emerged with great restaurants, cafes, wineries and breweries,” he commented.
“The NSW government is also funding improvements to the marina in addition to other projects. Owning in Coffs Harbour also offers good investment potential, should they later decide to rent out their property.”
- Western and South West Sydney
With the region boasting some of Sydney’s largest pipelines of infrastructure, which will boost the local economy and generate new jobs, the researcher flagged Western Sydney Airport’s opening and the appearance of business park projects and transport links as bolstering the residential market.
“First home buyers will be pleased to hear there have been some price declines in the market in recent years, giving them an opportunity to buy at below peak pricing, setting them up for long-term growth,” he shared.