First Home Buyers’ Time to Strike is Now

First Home Buyers’ Time to Strike is Now

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If you’re a prospective first home buyer waiting patiently, or not so patiently, for your opportunity, this is it.

Changing conditions are falling in favour of those looking to purchase their first home, as the property market continues to show signs of picking up.

The Coalition’s surprise Federal Election win, the RBA’s move to repeatedly drop interest rates and APRA’s decision to relax lending requirements have combined to help buoy the market.

But another key factor has also created positive conditions for first home purchasers not witnessed in years.

REA Group chief economist Nerida Conisbee said Scott Morrison’s election victory and the greater availability of credit were important factors that had fallen the way of those looking for their first home.

But what has helped to push the door further open is a market thin on investors.

“APRA might have eased lending restrictions but the banks are still being cautious and they view investors as high risk. Whereas first home buyers are seen as a group that are safe to lend to.

“That, and pullback from investors means first home buyers have the market to themselves. And that is a good thing because investors often target similar price points as first home buyers.”

Lincoln Eastment, a mortgage broker with East Financial, said the new credit conditions would likely lead to a greater influx of those searching for their first home, and purchasing it, than would have otherwise been the case.

“It won’t help people who don’t have a deposit, but it will allow those who do to borrow more and give them greater purchasing power,” he said.

“Those scrimping and saving for their first home deposit could move to buy their first home now, instead of continuing to scrimp and save for another six or 12 months, even two to three years.

“They can stop paying rent now and start paying off their mortgage.”

Further encouragement for those searching for their first home is set to increase the number of those property seekers in the market.

The Morrison Government’s First Home Loan Deposit Scheme, which begins on January 1, helps first home buyers to make a purchase with a five per cent deposit and allows them to save around $10,000 on Lenders Mortgage Insurance. NSW’s renewed first homeowner’s grant is another incentive.

Conisbee said savvy first home buyers were already capitalising on market conditions that had swung their way.

“Nationally we are seeing more first home buyers enter the market,” she said. “Especially in Sydney.”

“Now that prices appear to have bottomed out, first home buyers are coming into the market with confidence. Previously they didn’t want to make a purchase when they were worried prices could fall further.

“And the fact they now only need a five per cent deposit, as opposed to 20 per cent, before has resulted in a positive outlook for first home buyers.”

Source: News.com.au

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