First home buyers driving property demand

The Australian Bureau of Statistics (ABS) recently released their housing finance data for June 2018, revealing that first home buyers were one of the key drivers for the property market.

Figures show that the Australian housing market as a whole is coming off the boil, with housing finance down, largely due to a reduction in investor commitments.

The total value of housing finance commitments was $31.2 billion for the month, which was the lowest monthly value seen since January 2016. From this amount, $20.8 billion worth of commitments was made to owner occupiers and $10.4 billion was made to investors.

Lending commitments from both owner occupiers and investors was down in June 2018, however the proportion of first home buyers was at the highest level seen since October 2012, at 18.1 per cent.

The volume of first home buyer commitments has been on the increase since the middle of last year when both the state and federal governments introduced new government incentives.

In particular, many first home buyers in NSW and Victoria have been entering the market to take advantage of generous stamp duty savings that have been available since July 2017.

But it’s not just government incentives that are drawing first home buyers into the market. Many buyers are taking advantage of low interest rates and shrinking investor activity, which is making it easier to snare a property.

Tips for those who want to break into the market while the going is good: 

  • Look at a variety of areas – If you can’t afford where you want to buy then look to its neighbours or perhaps even further afield.
  • Talk to the bank of mum and dad – If you’re struggling to save a large enough deposit then your parents may be willing to help you out either financially, or by offering to sign on as a guarantor.
  • Consider LMI – Lenders’ Mortgage Insurance (LMI) provides a way to quickly jump on a property opportunity when you haven’t got a large enough deposit saved.
  • Get expert help – Talk to a mortgage broker or lender as early in the home buying process as possible so you understand your borrowing capacity. It can also be worth seeking the help of a buyer’s agent to help you find and negotiate the right property for you.

For any tips or advice about buying a first home in Mudgee contact the team at McGrath Central Tablelands.

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