From rising rents to government initiatives: why it could be the right time to buy in Sydney.

Property experts will say the best time to buy is when it’s the time is right for you. Having said that, there are several indicators in today’s market pointing towards now being a great time to purchase a property.


If you are in the position to buy then there’s no time like the present to start building up equity. Waiting around while trying to pick the market has left many buyers frozen in analysis paralysis at a time when they could have been on the property ladder creating personal wealth.


Here are our thoughts on why buyers today are in a good position.


State of the market

With the boom of 2021 – and the subsequent price correction – behind us, Sydney’s property values have started to creep back into positive territory. According to CoreLogic’s May Home Value Index, the city hit its price peak in January 2022 after increasing 24.5% during the pandemic-induced spike. Local values then fell -13.8% by the time they hit a cycle trough in January. Values have since climbed 3% so far this year, indicating that buyers who wait might be shopping in a seller’s market before too long.


Where interest rates are headed

Rising interest rates and reduced borrowing power have also kept purchasers on the fence as they wait for relief from the RBA.


After starting 2022 at just 0.1%, the official cash rate is now 3.85% so it’s harder to access finance today compared with the days of record low-interest rates prior to and during Covid. Not only are monthly repayments higher for mortgage holders, but buyers can now borrow significantly less today than they could have less than 18 months ago.


When the RBA kept the official cash rate untouched in April, it felt like the worse was behind us, but then another 0.25% increase came in May. However, according to Canstar, experts from the “Big Four” banks seem confident the rises could soon be over:

  • ANZ expects one more hike of 25 basis points in August to see the cash rate peak at 4.1%
  • Commonwealth Bank thinks the May rate hike was the last for this cycle
  • NAB expects another rate hike in July or August, also tipping the rate to 4.1%, and
  • Westpac thinks the cash rate has now peaked and expects it will remain at 3.85%.


Add to this the theory by all four that rates will actually be on the way down by next year, the future is looking much brighter for buyers.


Rents are on the rise

Anyone living in a rental property at the moment is likely well aware that rents are rising – fast. While it’s true home loan repayments are also increasing, there’s no doubt owning your own home gives you a greater sense of security.


CoreLogic also shows that Sydney is home to the country’s most expensive rents at $699 a week – up 12.6% in just one year with vacancy rates at a worrying 1.2%.


The soaring rents are a clear reason why getting into your own home makes great financial sense, but they are also a driver for investors to step into the market. At the moment the gross rental yield for all dwellings in Sydney is 3.22%, which is up from 2.48% a year ago.


First-home buyer help

It’s hard for first-time purchasers to enter the market, but there are some fairly attractive initiatives for those who are ready to make the move. Even with a modest deposit, a starter home might not be as far away as you think with some of the government-backed schemes;

First Home Guarantee

You may be eligible to buy a home with as little as 5% down, and no lender’s mortgage insurance. It’s available to 35,000 first-home buyers each financial year.

Regional First Home Buyer Guarantee

Much like the FHG above, eligible first-home buyers in regional areas can access an additional 10,000 places to buy with a deposit of just 5% and zero LMI. 

First Home Owner’s Grant (New Homes)

Purchasers buying or building a first home, such as a property at one of Landen’s premium estates, may be eligible for a $10,000 grant.

Shared Equity Home Buyer Helper

This initiative helps eligible home buyers purchase their own home with as little as a 2% deposit. The NSW Government will contribute a proportion of the purchase price in exchange for an equivalent interest in the property.   

First Home Buyer Choice

Designed to provide NSW first-home buyers with the option of paying a smaller annual property tax, instead of stamp duty, this scheme is applicable for property purchases up to $1.5 million but will cease after June 30.

Stamp duty exceptions

First-home buyers who purchase NSW properties from July 1 priced up to $850,000 will pay no stamp duty while concessions will apply for homes worth up to $1 million.

Speak to the Landen Lending team today to discuss opportunities for your financial future and specific grant options.