First Home Buyers Rush Into the Market

2008 will be remembered for a lot of things but one of them was the issue of housing affordability in Australia. Earlier in the year it dominated the news and the federal government even created a Housing Affordability Fund and significantly expand the National Rental Affordability Scheme.

With increasing interest rates and rising home prices the concept of home ownership was getting  out of reach of more and more people.  Over the past year the number of 18 to 29 years oldswith a home loan fell from 7.9% to just 5.1% which represents a reduction of 35% in 10 years. 

But like many other things in the world, so much has changed in the past few months. The global economic crisis that swept the world in recent months has certainly changed the landscape for first home buyers, particularly Generation Y which is the current 18 to 29 years olds.

From September this year Queensland first home buyers buying a home valued up to $500,000 do not have to pay stamp duty.  This represents a saving of $8,750 that you previously would have had to pay for transfer duty.

The recently announced First Home Owner Boost Scheme has topped off a fantastic opportunity for first home buyers and allows for an increase to the to base First Home Owners grant to total  $14,000 on established properties and $21,000 on new construction. 

Interest rates have dropped with cuts in September, October, November, and December slashing 300 basis points off home loan interest rates and experts claim that they will continue to fall next year.

So with house prices certainly relaxing over the same period there is no wonder that First Home buyers are jumping into property ownership at dramatic rates.  AFG’s latest figures show first home buyer loan volumes surged and are up by a massive 150% as an immediate response to the latest changes. 

For many first home buyers there has never been a better time to buy a first home but the circumstances that together form the current opportunities will not last forever.  Only time will tell how many will take advantage of the current conditions and make their first major investment in property.

In fact the opportunities presenting themselves to many Generation Y’s right now will form one of the most significant financial decisions many will face in a very long time.  How many will take advantage of them. 

As the highest selling agency in one of the Gold Coast’s primary “First Home Buyer” districts we are looking forward to the continued growth in this segment of the market through the first part of 2009. This activity will no doubt underpin the growth in all property sales throughout the next 12 months.

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