Challenging real estate market conditions and increasing interest rates can be an opportunity for those in the position to act. We are seeing increased interest from first home buyers, upgraders and investors looking to take advantage of short-term market volatility.
Where there are interest rate rises leading to fear in the marketplace there is also opportunity. Some will delay purchase to ‘wait and see what is going to happen’: This decreases competition in the marketplace, just what a canny buyer is looking for.
Concurrent with this, First Home Buyers have multiple support packages currently available, including State Government stamp duty relief and Federal Government assistance for those with a deposit saving of at least 5%.
Such assistance is targeted at ‘modest homes’ – first home buyers of million-dollar properties need not apply!
The First Home Guarantee (FHBG) is an Australian Government initiative to support eligible first home buyers purchase their first home sooner, with 35,000 grants available over financial year 2022-23.
Usually, first home buyers with less than a 20 per cent deposit need to pay lenders mortgage insurance (LMI). Under the First Home Guarantee, eligible first home buyers can purchase with a deposit of as little as 5 per cent (lenders criteria apply) without the LMI cost. This in effect replicates a parent guarantee situation with the Federal Government being guarantor instead of Mum & Dad.
Benefits and savings are genuine and make a huge difference to the average first home buyer.
There are multiple rules and eligibility requirements for the FHBG. It is important to note the scheme is not available to assist you at most banks.
Prospective first home buyers need to speak to their broker to be aware of what is required to enable home ownership. Financial strategy in property purchase can be complicated and is different for every individual in a different situation. Quality advice is paramount.
On a general commentary level, real estate agencies are reporting increased ‘days on market’ for all price range properties. This is a reflection of the decreased buyer competition and is creating potential opportunity for buyers at all price points.
Increasing interest rates are effectively decreasing the maximum amount banks will lend to you – however that is only a problem if you were pushing to your limit previously. Budgeting remains important and integral for existing and future property mortgage holders.
Integrity Finance Australia has been serving the community since 2006, and yes, we are accepting new clients. Call us on (03) 9511 8883 or email support@ifafinance.com.au.