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First Home Buyers

First Home Buyers Heading Back To Land Market

First home buyers are moving back into the new land market with lower interest rates, a new Federal Government stimulus package and a return to price growth driving an increase in the number of new home loans being approved.

According to the Australian Bureau of Statistics (ABS) the number of loans to owner occupier first home buyers rose 5.2 per cent in August compared to July. In Queensland, lending to first home buyers has increased nearly 25% since April when borrowers were concerned about the outcome of the Federal election.

Providence Sales Manager Jamie Martin said the increase was the strongest rise this year and indicated more first home buyers were being successful in applying for loans.

“A lot of the positive data we are seeing at the moment pre-dates recent cuts to interest rates so we would expect more good news in the future as buyers who have been sitting on the sidelines enter the market,” he said.

“The cuts to interest rates, further relaxation of lending rules, and the tax offsets that come in early next year will likely further boost the participation of first-home buyers in the market.”

In another strong sign buyer sentiment is improving the Housing Industry Association (HIA) reports that the number of new homes commencing construction in the June quarter increased by 1.1 per cent, the first increase since December 2017.

MARKET DRIVERS

The improved sentiment has been put down to three main issues that affect first home buyers:

  • Interest rates - the Reserve Bank of Australia (RBA) recently made back-to-back interest rate cuts with rates now at their lowest level in decades. Three of Australia’s four largest banks now offer fixed home loan interest rates below 3%.
  • Increased Prices - After two years of bad news for house prices, particularly units and the established home markets in Melbourne and Sydney, recent data showing prices are rising again has improved the outlook for all sectors of the market. Falling prices generally discourage buyers over fears their property will decrease in value while rising prices increase buyer fears they will miss out on any increases.
  • First Home Loan Deposit Scheme - The Federal Government’s First Home Loan Deposit Scheme will assist an eligible first home buyer to purchase a house with a 5% deposit. The government will provide a loan guarantee of up to 15% of the property’s value to individuals earning up to $125,000, or couples earning up to $200,000, per year. The scheme could also save you up to $10,000 in lenders mortgage insurance. While applications for the scheme do not open until January 1, 2020, it is expected to bring a range of new buyers to the market, further driving up competition and prices.

TAKE A TOUR

Providence currently has a wide variety of affordable homesites suitable for first home buyers, including a number eligible for our $5,000 Education Bonus.

Buyers are welcome to join our regular “Open Providence Tours” hosted by our Sales Manager Jamie Martin. Each tour includes a visit to all our existing and upcoming infrastructure and community facilities as well as available homesites.

Providence is the largest masterplanned community in the Ripley Valley is already home to more than 3,000 people.

To book your tour please call our sales team on 1800 604 246.