First home buyers returning to the property market
Below is an article published on www.businessinsider.com.au about the record number of home loans to buyer occupiers that have been granted to first home owners. It is the highest it has been in the last three years, this is great news. But it is also essential to make sure you have the right legal advise before you make the largest or one of the largest financial investments in your life. Our team of Property Lawyers can guide you through the process.
Loans to Australian first-home buyers rose to the highest level in close to three years in June, according to data released by the Australian Bureau of Statistics (ABS), driven by a surge of activity in Queensland.
In original terms, the ABS said new loans to owner-occupiers rose to 8,573 during the month, the largest increase since October 2014.
First-time buyers accounted for 15% of total owner occupier loans issued in July, continuing to recover from a record low of 12.9% struck in March 2016.
The proportion of owner-occupier loans was the largest since February 2015.
The recovery in first-home buyer activity can be seen in the chart below.
By state, Victoria recorded the largest number of first-home owner loan approvals at 2,367, although that was down on the 2,431 level of month earlier.
Helping to explain much of the boost in the national figure, new loans in Queensland jumped to 2,257, the largest monthly total since October 2009.
On June 30, a temporary boost to Queensland’s first-home buyers grant to $20,000 expired, seeing it reduced to $15,000. That likely brought forward some demand before the expiry of that increase.
Elsewhere loans in New South Wales and Western Australia fell back from the levels reported in June while they increased in South Australia.
Given the evidence from Queensland in June, along with the national increase in the first-home buyer activity during the global financial crisis in response to increased grants, it’s likely that first-home activity will continue to increase in the months following the introduction of new stamp duty concessions in New South Wales and Victoria.
In Victoria, stamp duty is now abolished for first-home buyers for property purchases below $600,000. Properties valued between $600,000 and $750,000 are also be eligible for a concession, applied on a sliding scale.
In New South Wales, stamp duty has been abolished for first-home buyers on existing and new properties worth up to $650,000, with stamp duty discounts offered on properties valued up to $800,000.
“We’ve seen an increase in first home buyers definitely since July 1,” Max Shifman, chief operating officer of Intrapac, told the Australian Financial review. “The proportion of sales has swung in favour of first home buyers. There’s definitely been an increase.”
Poly Agency — the real estate agency arm of Chinese developer Poly — said sales at its Poly Horizon project in Epping in Sydney’s northern districts and Grove Place in Werrington in western Sydney had both picked up in July largely due to strong first home buyer demand.
“By late July, enquiries picked up with a significant return of buyers that we haven’t seen for a while such as first-home-buyers, owner occupiers and downsizers,” said general manager Wegland Lau.
When first-home buyer grants were increased nationally in the wake of the global financial crisis, the proportion of new owner-occupier loans going to first-home buyers briefly increased to above 30%.
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