April Newsletter
Property Boot Camp – 9 ways to get through the downturn
Oh to be a first homebuyer... I don’t know about you but when I bought my first home, there was no such thing as a government handout.
That of course changed on July 1, 2000 when the First Home Owner Grant (FHOG) was introduced. Under the FHOG scheme, a one-off grant of up to $7000 became payable to first homeowners who satisfied the eligibility criteria. Then last October the Rudd Government announced the First Home Owners Boost (FHOB), which effectively increased the FHOG to $14,000 for the purchase of established properties and to $21,000 for newly built properties.
But the clock is ticking on this additional funding.
While many are speculating that the government will extend the FHOB, the grant is due to revert back to $7000 at the end of June. First homebuyers who are willing and able to get their foot on the property ladder may regret waiting too much longer to act, especially as some lenders are reporting lengthy turnaround times for loan applications due to the increased market activity.
But the extra money on offer from the government isn’t the only reason why first homebuyers should think about making their move.
Rather than panicking about the global financial crisis, first homebuyers should probably be grateful for some of the opportunities it’s sending their way.
Big name residential developers are offering large rebates to first homebuyers in a bid to secure sales and shift their housing stock. Some are throwing in free upgrades of fittings and fixtures for newly built homes, while others are offering to top up the grant by several thousands of dollars.
Then there’s the fact that interest rates are at 40-year lows which has significantly improved affordability.
It’s also very much a buyers’ market, with plenty of bargains to be had and buyers holding all the cards in terms of negotiating a good price.
More importantly, the gap is narrowing between renting and buying, so for the first time in a long time buying is becoming a more economical option for many renters – not to mention one that helps them establish their financial security.
Finally, the individual state governments also provide a raft of incentives and exemptions for first homebuyers which can represent five-figure savings in many cases. For all the details, plus frequently asked questions and mistakes to avoid, you can download API’s comprehensive First Homebuyers Guide at www.apimagazine.com.au/ebooks.
While first homebuyers might be getting it easy right now, we’ve got some tough love in store for property investors who are brave enough to take part in API’s boot camp. The first training session starts on page 32 and recruits can come back for more in part two next month. Good luck!
Eynas Brodie
Editor
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