The advantages of buying off the plan apartments for first home buyers in Melbourne
First home buyers in Melbourne have a fantastic opportunity to enter the property market, benefiting from some of the most attractive purchasing incentives available in Australia.
Unlike many other states, the calculation of stamp duty in Victoria isn't straightforward. In places like New South Wales, any apartment under a set threshold of $800,000 incurs no stamp duty, effectively excluding most apartments within a 15-kilometre radius of Sydney. In contrast, many one-bedroom apartments in Melbourne’s inner city are priced below $750,000, opening up more possibilities for buyers.
Why is now an opportunity for first home buyers?
Currently, first home buyers in Melbourne find themselves in a favorable position, as they are not competing with investors for off-the-plan apartments. While most boutique developments focus on larger two- and three-bedroom units, many high-rise buildings—over 20 levels—feature entry-level apartments that are ideal for first-time buyers.
Moreover, some developers are offering flexible contract terms, including negotiable five percent deposits. There’s also positive economic news, with inflation showing signs of decline, potentially paving the way for the Reserve Bank of Australia to lower interest rates in 2025.
In the off-the-plan market, buyers won’t start paying their mortgage until the apartment is completed. Therefore, it's crucial to consider expected interest rates at that future time rather than the current rates. Market forecasts suggest four cuts in the next 12 months. When rates decrease, entry-level apartments will become more appealing to investors—who typically have more capital than first home buyers—leading to increased competition.
What does the data say?
Data from MatterFact, Urban.com.au's new data product, indicates strong demand from first home buyers in 2024.
Over 40 percent of inquiries in Melbourne this year have come from this demographic, down from 50 percent in 2023.
This slight decline is primarily due to changing apartment configurations but demonstrates that interest rates have not significantly deterred first home buyers.
How do I calculate what I can save?
First home buyers in Victoria can take advantage of two key incentives: the First Home Owners Grant (FHOG) and stamp duty concessions. The FHOG offers $10,000.
Calculating stamp duty can be a bit complex. It’s based on the apartment's price minus the construction cost in the contract. The dutiable value is applicable when this figure is between $600,000 and $750,000, allowing for potential duty concessions.
For the most current information on concessions and eligibility, it's best to visit the State Revenue Office website.
What can I buy?
With the high threshold to receive concessions, there are plenty of opportunities to buy all across Melbourne.
We've wrapped up the best opportunities for first home buyers across Melbourne.
What: Fareham, St Kilda
Where: 95 St Kilda Road, St Kilda VIC 3182
Who: Gamuda Land
Fareham in St Kilda has a handful of one-bedroom apartments in the 16-level building on St Kilda Road that has been designed to be one of the greenest in Melbourne.
The 73-unit project is set to achieve a 7.5-star NatHERS rating, supported by renewable energy sources and eco-friendly features like EV charging and secure bike parking.
With a focus on integrating nature into urban living, Fareham offers bay views, a communal rooftop, and extensive landscaping.
First-home buyers can benefit from the long construction timeline, offering more time to save, while the energy-efficient design lowers long-term costs.
Prices for one-bedroom units remain competitive compared to the growing Melbourne market.
What: BLVD at Melbourne Square
Where: 19 Hoff Boulevard, Southbank VIC 3006
Who: OSK Property
BLVD is the latest addition to Southbank's burgeoning Melbourne Square precinct, offering a 73-level skyscraper with just under 600 apartments.
Designed by Cox Architecture, it focuses on wellness and connectivity, with extensive amenities such as an indoor pool, gym, sauna, and work-from-home facilities.
BLVD caters to first-home buyers by offering a low deposit requirement and extensive wellness-focused amenities, ensuring comfort and practicality for urban living.
One-bedroom units are priced from $611,000.
What: Melbourne Square
Where: 93-119 Kavanagh Street, Southbank VIC 3006
Who: OSK Property
OSK Property still has some apartments remaining in an earlier stage of Melbourne Square.
The remaining two and three-bedroom apartments are well-suited for first home buyers looking to secure property in Southbank, where prices start from $769,100 for two-bedroom units.
The completed tower includes a range of amenities such as a 50-metre swimming pool, gym, and communal dining spaces.
What: FOCUS
Where: 81 City Road, Southbank VIC 3006
Who: Central Equity
FOCUS offers completed, ready-to-move-in apartments in a 50-level tower in Southbank.
One-bedroom apartments at FOCUS start from $629,000, offering a great entry to the market for first home buyers.
The development includes amenities such as a heated pool, gym, cinema room, and resident dining areas.
First-home buyers can benefit from the immediate availability of apartments, combined with competitive pricing that qualifies for the First Home Owner Grant.
The central location also makes it an attractive option for those wanting to be near the city's amenities.
What: Parkhill Apartments, West Melbourne
Where: 408 Spencer Street, West Melbourne VIC 3003
Who: Central Equity
Parkhill Apartments offer some of the most price-pointed apartments on the market.
The one-bedroom apartments start from $519,000 in the recently completed building on the fringe of Flagstaff Gardens.
The development features a rooftop gym and garden, secure parking, and durable, premium fixtures.
Parkhill’s reasonable price points, combined with its location near education hubs and public transport, make it a strong choice for first home buyers.
