 Grants popular as conditions ease
An outstanding increase in the number of first-home owners grant (FHOG )applications in December show that some Australians are taking full advantage of lower interest rates and falling property prices. Queensland has seen a good start to the new year with large numbers of potential buyers turning up for inspections over the weekend.
The Real Estate Institute of Queensland (REIQ) says that first home buyers are offering the real estate market some hope, and a chance of hanging on through the global economic slowdown. Applications for the grant almost doubled from August to December 2008. Figures from REIQ show that in December 2859 first-home buyer grants were paid, compared to just 1603 grants in August.
REIQ chairman Peter McGrath says the main groups that were out on the weekend were investors taking a look at the current market, and first home buyers looking to spend some of the increase to the grant. He does warn that although large numbers may attend the house inspections it does not necessarily mean this will convert in to sales.
Queensland Treasurer Andrew Fraser was encouraged, and said the abolition of mortgage duty and stamp duty for first-home buyers on properties up to $500,000 had contributed to the spike in grant applications. ''It's an encouraging outcome considering the economic climate and the usual slowdown over the Christmas period,'' Mr Fraser said.
The increase in FHOG payouts is thought to be due to a combination of lower interest rates, falling property prices and a boost to the grant. These factors are encouraging first home buyers who had previously felt priced out of the market.
The doubling of the grant for new owners, and trippling for those building or buying a new home. is applicaable for all mortgage approvals until June 30 which may explain why the increase has happened fairly quickly. Potential first home buyers will be keen to get into the market now while conditions are so favourable.
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