First Home Buyers 4: Investors 0

first home Buyers back in Market

Recently, Australia’s two largest states have announced generous packages for first home buyers.  And it has become much tougher for investors to get finance.

First home buyers have long been crowded out of the market and these recent changes will make it much easier for them to get on to the property ladder.

In NSW, first home buyers can now save as much as $34,000 due to the abolition of some, or all, of their stamp duty.

Victorian first home buyers will see their First Home Owners Grant increase to $10,000 on new properties and stamp duty on all first purchases will decrease by 40 per cent.

First home buyers and investors often compete for the same property.   Now, finance is getting much tougher for investors.  The Australian Prudential Regulation Authority (APRA) is now requiring banks to cap their interest-only loans – normally the preserve of investors. 

As a result, investors are now facing two rate rises – one for being an investor, the other for having interest-only loans.

But the good news for first home buyers keeps coming.  In Sydney and Melbourne in particular, with prices dropping by just over one per cent.  Part of this was due to a tsunami of new properties now being completed – giving first home buyers more home choice.

And the good news for first home buyers keeps coming with one mid-tier lender offering a special first home buyer package with low rates, and reductions on Lenders Mortgage Insurance as well as building and contents insurance.

So, for first home buyers:

1.       state governments have reduced stamp duty

2.       the federal regulator has made it tougher for the competition

3.       developers are offering you more affordable properties; and

4.       some banks are discounting rates.

First Home Owners: what are you waiting for?