If there was ever a time to talk to a mortgage broker about a home in Kwinana, Baldivis or anywhere else in the Rockingham area, it may be right now.
There are five reasons why the housing market is currently working in favour of first home buyers. Let’s take a look at them.
First Home Owner Grant (FHOG) and Rate of Duty (FHOR)
In WA, first home buyers who buy a new home get a $10,000 grant. In addition, they only have to pay stamp tax duty on the property and not the building, as long as the property is not worth more than $400,000. There is no stamp duty on the first $300,000.
More Owner Occupier Loans
In June of 2015, there was a 0.3% increase in owner occupier loans. It doesn’t sound like a lot, but it is movement in a beneficial direction for first home buyers.
Restricted Lending to Investors
In December 2014, the Australian Prudential Regulation Authority decided to restrict investment loans to property investors because they felt the growth in investment properties was making it more difficult for owner-occupiers to buy homes. They ordered lenders to restrict investment loan growth to 10% per year. This has caused lenders to tighten up investment loans and place more restrictions on them. It has also resulted in a more friendly environment for owner-occupier loans.
Record Low Interest Rates
The Reserve Bank of Australia (RBA) cash interest rate is still at a record low 2%. Lenders are passing it on to their customers and some home loans are going out under 4%. Low rates won’t last forever, but when someone is trying to enter the home market, low rates help them do just that.
Prices in the Rockingham area have flattened out over the last year. Some have even decreased a bit. This has produced a “sweet spot” where both prices and interest are low. Take advantage while you can.
For more info or to enquire about a home loan, call Smartline Rockingham: (08) 9527 1800.