Mortgage brokers in Rockingham have noticed that, despite a slow August and some predictions of gloom and doom, first home buyers are still applying for loans and purchasing homes. According to the Australian Bureau of Statistics (ABS), 12% of homes purchased in August were purchased by first home buyers.
Economists and real estate brokers point to a number of factors as working against first home buyers. They cite the inability of stagnant incomes to keep up with cost of living rises. In addition, changes to grants for first home buyers, specifically the lowering of stamp duty exemption to $430,000 compared to a median home price of $540,000, have kept some from entering the market.
Nationally, first home buyer loans are lower than they were ten years ago: 77,881 in August 2014 as opposed to 87,577 in August 2004. Another reason being cited by many is international buyers but that is wrong, according to National Australia Bank (NAB) Chief Economist Alan Oster. Mr Oster says that local property investors are more responsible for rising prices than international investors. Mr Oster states further that he feels international investors tend to purchase more expensive properties that have no effect on mainstream prices.
Another possibility raised by Mr Oster: first home buying may be underreported because the numbers don’t count those who didn’t apply for the First Home Owner Grant (FHOG).
What This Means to You
We see a market that is steady and interest rates that continue to remain at all time lows. We feel that there will never be a better time for those who can afford it to buy their first home than now. It does cost a bit to get that initial deposit but we think that prices are set to rise in 2015. Interest rates won’t stay low forever, either.
Call Smartline Rockingham today to see if you qualify for a loan to buy your first home: (08) 9527 1800.