Last weeks cuts to home loan interest rates are encouraging first-home buyers
back to the property market. Within minutes for the Reserve Bank announcing a
cut of 100 basis points to the official rate, several major lenders confimed
they would cut their standard variable home loan rate by between 80 and 100
basis points.
The latest cut, on top of other cuts during October and November, have
reduced home loan interest rates by as much as 300 basis points. Three months
ago interest rates for standard variable mortgages were nearly at 10% but the
multiple cuts have brought the rate down to just under 7% with most lenders.
"Mortgage repayments are significantly lower than they've been for a long
time and may go even lower,'' he said.
"Property prices in many areas have become more affordable.
"And buyers
are keen to take advantage of generous government incentives while they're still
on the table.'' said AFG general manager sales and operations, Mark
Hewitt.
The increase to the First-home buyer grant is also
thought to be a contributing factor in encouraging buyers back to the market.
In November, the government announced the grant would be doubled to $14,000 for
those buying an established home, while those buying a newly constructed home
would receive $21,000 as a one off grant designed to help first home buyers
afford their own home.
And recent figures show that property prices are
falling nationwide also. Data from the Australian Bureau of Statistics show
that house prices dropped by 1.8% in the September quarter.
Many
mortgage brokers and economists agree that the combination of lower interest
rates and falling property prices, the easing of petrol prices, and the boost to
the First-home buyer grant results in this being a good time to buy your first
house.