Brokers across Australia explain how the first home buyer market is tracking in their towns
Brokers across Australia explain how the first home buyer market is tracking in their towns
Simon Kahl
General manager
The Loan Company, Perth
While the Perth market has been on the decline for the last two to three years, recent figures indicate that the WA economy is starting to head in the right direction. The unemployment rate has been decreasing and there are currently over $100bn worth of mining projects under construction or in the committed stage of development. I believe Perth prices have hit the bottom of the market and that we’ll see a significant increase in FHB activity in 2018 as a result of these lower prices. Furthermore, with the 10k First Home Owner Grant remaining available in WA to FHBs (for construction and newly built homes only), I have definitely seen a consistent level of enquiries for new home sales and would expect this to trend upwards as buyers return to the market.
Mark Williams
Home loans specialist
Right Angle Home Loans, Brisbane
We are seeing a very small increase in the FHB market. This segment slowed rapidly when the government pulled back the First Home Owner Grant from second-hand homes to newly established homes only. However, we are now starting to see a trend with our development clients, who are targeting FHBs and building a product that is sub-$500k, brand new, in the outer suburbs of Brisbane, in what are now known as satellite suburbs. If they purchase after 1 July 2016, FHBs are eligible for a $20k grant and nil transfer duties if the purchase price is kept under $500k. The lenders are fighting hard for this type of loan and are offering very competitive interest rates for owner-occupied security with P&I repayments. The Australian dream is still alive for FHBs!
.JPG)
Jonathan Lee
Owner/manager
Mortgage Choice Melbourne Inner West
Absolutely. Over the last couple of months, I have seen a spike in first home buyer enquiries and referrals. While I guess it depends on the markets you operate within, as a Melbourne-based broker I am seeing more and more first home buyers entering the market in a bid to make use of the FHB incentives currently on offer. Earlier this year, the government abolished stamp duty for FHBs purchasing property up to the value of $600,000. In addition, it extended the First Home Owner Grant. Both of these incentives have helped drive overall demand from this type of buyer. And, with interest rates continuing to hover around record lows, now really is a great time to be an FHB.
THE RESURGENCE OF FIRST HOME BUYERS
Lender ME reported a rise of 17% in FHB applications over July and August 2017 compared to the same time last year. It noted the largest increases were in Western Australia, Queensland and Victoria. The bank’s figures also showed FHBs borrowed on average $369,000, up $26,000 (8%) in July and August 2017 compared to the same period last year. Central Economic Development Agency (CEDA) research has found that mortgage holders in the younger age brackets are increasingly highly geared as real housing prices have overtaken real incomes. It reported the mortgage debt-to-income ratio of those aged 25–34 years as “spiralling” by 141 percentage points versus 115 points for those aged 35–44.
Source: CEDA Report: Housing Australia August 2017; ME media release September 2017
Lender ME reported a rise of 17% in FHB applications over July and August 2017 compared to the same time last year. It noted the largest increases were in Western Australia, Queensland and Victoria. The bank’s figures also showed FHBs borrowed on average $369,000, up $26,000 (8%) in July and August 2017 compared to the same period last year. Central Economic Development Agency (CEDA) research has found that mortgage holders in the younger age brackets are increasingly highly geared as real housing prices have overtaken real incomes. It reported the mortgage debt-to-income ratio of those aged 25–34 years as “spiralling” by 141 percentage points versus 115 points for those aged 35–44.
Source: CEDA Report: Housing Australia August 2017; ME media release September 2017
Simon KahlGeneral manager
The Loan Company, Perth
While the Perth market has been on the decline for the last two to three years, recent figures indicate that the WA economy is starting to head in the right direction. The unemployment rate has been decreasing and there are currently over $100bn worth of mining projects under construction or in the committed stage of development. I believe Perth prices have hit the bottom of the market and that we’ll see a significant increase in FHB activity in 2018 as a result of these lower prices. Furthermore, with the 10k First Home Owner Grant remaining available in WA to FHBs (for construction and newly built homes only), I have definitely seen a consistent level of enquiries for new home sales and would expect this to trend upwards as buyers return to the market.
Mark WilliamsHome loans specialist
Right Angle Home Loans, Brisbane
We are seeing a very small increase in the FHB market. This segment slowed rapidly when the government pulled back the First Home Owner Grant from second-hand homes to newly established homes only. However, we are now starting to see a trend with our development clients, who are targeting FHBs and building a product that is sub-$500k, brand new, in the outer suburbs of Brisbane, in what are now known as satellite suburbs. If they purchase after 1 July 2016, FHBs are eligible for a $20k grant and nil transfer duties if the purchase price is kept under $500k. The lenders are fighting hard for this type of loan and are offering very competitive interest rates for owner-occupied security with P&I repayments. The Australian dream is still alive for FHBs!
Jonathan LeeOwner/manager
Mortgage Choice Melbourne Inner West
Absolutely. Over the last couple of months, I have seen a spike in first home buyer enquiries and referrals. While I guess it depends on the markets you operate within, as a Melbourne-based broker I am seeing more and more first home buyers entering the market in a bid to make use of the FHB incentives currently on offer. Earlier this year, the government abolished stamp duty for FHBs purchasing property up to the value of $600,000. In addition, it extended the First Home Owner Grant. Both of these incentives have helped drive overall demand from this type of buyer. And, with interest rates continuing to hover around record lows, now really is a great time to be an FHB.
