Monday, September 1, 2008

First home-owner hope

A recent Housing Industry Association survey showed that a record 50 per cent of Generation Y Australian’s (people born between 1975 and 1990) are living at home with their parents. The figure for Queensland is slightly lower, at 44 per cent and from this week, it might just get a little bit better.

Three reasons:

  1. From today, the Queensland state government has abolished stamp duty on homes with a purchase price up to $500,000. First-home buyers will be exempt from stamp and mortgage duty on homes up to $500,000, a saving of around $10,000. Prior to today, the purchase price threshold for exemption from these taxes was $350,000.
  2. Tomorrow, a mortgage will cost just that little bit less with the Reserve Bank (RBA) widely tipped to cut interest rates. A cut tomorrow by at least a quarter of one per cent will be the first easing since December 2001 and will help make life a little easier for potential first home owners. The prospect of banks not passing on the RBA cut to retail customers now seems unlikely with recent announcements by NAB, ANZ and Suncorp. On top of this Wizard Home loans has stolen a march on its much bigger rivals. As of today Wizard, cut its standard variable lending rate by 25 basis points in advance of tomorrow’s RBA announcment.
  3. The housing market is stagnant (despite what some real estate agents might optimistically say) and house prices are falling. So although prices are still very high (Australia currently ranks as having some of the least affordable property in the english speaking world), it’s a buyers market.

While home affordability is still very tough, these three developments should put some welcome purchasing power in the hands of the first home buyer (and maybe free up a spare bedroom for some Boomer Generation mum and dads)

No comments: