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Cashed-up spenders or savers
Friday, 31 October 2008
The Rudd government is hoping that the $10.4 billion consumer relief package will lure young families and first home buyers into spending the extra grants and in so doing, stimulate the economy. The interesting question is whether or not this will indeed unfold as the government plans. With growing job insecurity and unemployment, falling share prices and more restrictive bank lending there’s no telling if Australians will choose to hold onto the extra cash or hold off on buying a first home. There’s talk of this being the most dire financial crisis since the 1930s Depression. Changing attitudes and behaviours amongst 18-30 year olds will emerge and may begin to show similarities to that of their grandparents in the way they begin to view their financial security.
HIA Index Reveals Slight Improvement in Affordability
Friday, 24 October 2008
Recent figures show a small improvement in housing affordability for first time buyers, according to the latest HIA-CBA First Home Buyer Affordability Report.
Results show that due to lower median first home prices, over the September quarter the average first home loan repayment fell by 1.5 per cent to $2,785 per month, though housing affordability for first home buyers remains near record lows.
According to HIA Chief Executive – Policy, Mr Chris Lamont, there are some reasons to be cautiously optimistic about improved housing affordability, with additions to the First Home Owners Grant providing a welcome confidence boost, and recent interest rate cuts expected to provide further improvements.
Mortgage repayments accounted for 27.5 per cent of total first home buyer
income, which while lower than the previous quarter were still the fourth highest on record.
Renewed optimism for first home buyers
Friday, 24 October 2008
Following the Rudd government’s announcement last week to boost grants for first home buyers by $1.5 billion, agents and builders have already reported a marked increase in inquiries from first home owners keen to take advantage of the bonus government money, and lower mortgage interest rates.
"First home buyers have been coming into our office, which is unusual as it's usually only second and third home buyers who can afford a new home”, suggested one house and land package sales manager.
Given the turmoil in financial markets, first home buyers along with property investors have been staying out of the market, with Reserve Bank of Australia figures showing demand for home loans has plunged to its lowest level since the early 1980s and loans to investors are at their lowest level on record.
The tripling of the first home owners grant for new homes could inject some stability back into the housing construction market. At the very least confidence in the property market has improved, and according to Citigroup’s director of economic and market analysis, Shane Lee, the extra government incentives should result in a property market recovery in the first half of 2009.
Rate cut may help with rent - for a while
Friday, 17 October 2008
An ease in rental prices is good for right now but it’s not all good news for the longer term. Whilst some landlords are lowering rents or at least leaving them unchanged in the wake of recent interest rate cuts, the latest data from Australian Property Monitors warns that prices will most likely rise again due to a lack of supply and stronger demand for rental properties.Senior economist Liam O’Hara says that we will see upward pressure on asking rents. It seems renters aren’t out of the hot water yet.
First Home Saver Accounts - See how they work
Thursday, 16 October 2008
First Home Saver Accounts can help you buy a home sooner, by boosting your deposit savings for a first home.
FirstHomeSaver.com.au has launched an online First Home Saver account calculator to provide an indication of the savings potential a First Home Saver account can have over regular savings accounts.
First Home Saver accounts offer incentives from the Federal Government that are designed to give Australians a helping hand in saving towards home ownership.
Savings in a First Home Saver account benefit from:
- bonus money from the Government (a co-contribution of 17% on savings up to $5,000 p.a.)
- low tax on earnings (at 15% just like superannuation)
The First Home Saver account calculator uses income level and regular savings amounts to project the end balance in a First Home Saver account after a given number of years, and then compares the outcome to a regular savings account to highlight how much extra could be accumulated.
The calculator is not modelled on any particular product offering, but is provided to simply show the relative benefits of First Home Saver accounts.
Checkout the First Home Saver account calculator.
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