First Home Buyers Keener, Houses Win Against Apartments
I am quite happy with the recent surge in first home buyer (FHB) involvement in the Australian property market. They have laid low for a long time now but in the last three months or so, there has been a 50% increase in their flock. Petra Sprekos for the Real Estate View observes the trend.
RBA cuts are reassuring for FHBs
The global financial crisis (GFC) and high interest rates together contributed towards the prolonged absence of first home buyers. Seeing the rates low for so long, they probably got a sniff that it is no more a “flash in the pan” situation and that the rates may remain low for some time.
RBA keeps reassuring them with frequent rate cuts these days. All said, they have come back strongly, forming 29.4% of the entire market.
Buyers are inclined towards houses (as against apartments)
Sprekos also observes that the penchant of buyers is towards houses and not apartments. The hike in population is resulting in smaller houses and whole lot of high rise architecture yet buyers are still looking for the “great Australian dream” called house like never before.
Buyers should not set illusory budgets
Sprekos however suggests (and rightly so in my opinion) the buyer fraternity that median house prices in capital cities will definitely shoot above $400,000 in no time from now and hence buyers should not make below-$400,000 (can be deceptive) budgets for themselves.
You can read the original article here.
Grant policies have changed
I think that the first home buyers found a reason to rejoice when government’s grant policies changed because it meant more lucrative grants. However, few also felt short-changed because the new policies were restricted only to new homes (and not established homes). Anyway, things are looking up and it’s great to see this important hierarchy back in business.
Interest rates may spike soon
I will personally guard them against taking the low cash rates too seriously. Lenders are already talking of increasing the fixed rate and this is clear enough sign that interest rates may not remain this low for too long now.
After all, lenders do not mind decreasing fixed rates below the variable rate when they believe that cash rates may dip further . However, they look to increase fixed rates as soon as first signs of interest rate hike show up; which is just the case now.
What points do you ponder over before locking in your rate?