Great question and plenty of triggers can encourage renters to buy a first home. 

You may have had a job promotion and are now in a stronger position to service a loan on a first home. Alternatively, the bank of mum and dad might have offered some financial support making it easier for you to move out of your rental digs.  

Since COVID, plenty of tenants have been paying very affordable rents, enabling them to save a decent deposit. Now that landlords are starting to revisit the rents, with a decent deposit and some other government first home buyer incentives and stamp duty incentives, the time might have arrived to transition from renter to first homeowner. 

In Western Australia, if you live south of the 26th parallel, which covers the Perth metropolitan area, you can claim a $10,000 FHOG WA if your new home plus the land value is worth up to $750,000. If you buy or build a new property north of the 26th parallel, the property must be up to or below $1 million to be eligible for the grant. 

There are now 35,000 places available this financial year under the First Home Guarantee, which provides access to a minimum deposit of 5% and avoids Lenders’ Mortgage Insurance that can add many thousands to the cost of a first home loan. 

There are also several state-based initiatives in the market worth checking out. In NSW, the new First Home Buyer Choice initiative allows first-time buyers to choose between paying an ongoing property tax instead of an upfront stamp duty charge from January 16, 2023. The scheme applies to properties valued up to $1.5 million. If you’re buying vacant land to build a new home, the price cap on the scheme is $800,000.

While higher interest rates might be putting you off buying in the short term, there’s some blue sky on the horizon. For instance, AMP’s Chief Economist Shane Oliver believes the cash rate is near the top because the lag from the series of nine consecutive hikes will soon start to take effect, “while inflationary pressures are easing globally and showing signs of easing here too.

“But given the RBA’s more hawkish tone, we are allowing for one more 0.25% hike in March followed by a pause ahead of the start of rate cuts late this year or early next year.” 

The possibility of interest rate cuts sounds like good news for renters looking to shift to a first home – as long as they can service their borrowings in the shorter term.