Browse Forums General Discussion 1 Oct 17, 2008 10:38 am Now that first home owners grant was doubled to $14,000 for existing properties and increased to $24,000 for new constructions in NSW , real estate agents are predicting that prices will increase by the same amount as demand increases.
Sad turn of events, isn't it? As a result of quick feedback from our customers who are currently searching for homes at the lower end of the market in Sydney, several real estate agents in the City of Blacktown have reported their cheapest properties as sold within days of the announcement of the increase. Under the Government scheme, first-home buyers purchasing established homes will have their grant doubled from $7000 to $14,000 until July 2009. The $7000 increase makes a world of difference in the typical first home price bracket of up to $500,000. It is a significant increase to their deposit. The increase in the grant may even allow first home buyers to buy a $400,000 property with an approved 97% home loan and no saved deposit. Re: First Home Owner Grant now $24000! Sydney House Prices Next? 2Oct 17, 2008 10:56 am uhmm.. probably they can 'buy' an established property now by having an extra deposit from government.. But do they actually can afford mortgage repayment in the long term? (In mind, today's economic situation is like a roller coster and also unemployment rate is increasing nowadays) First Home Owners Grant Double $21000 / Sydney home prices 3Oct 17, 2008 11:06 am The fact that the increase in the First Home Grant coincides with the lowering of lenders' fixed rates by 1.5% and variable rates by 1.05% makes home loans more affordable than in more than a year.
It is possible now to fix home loan rates at 7.69 for 3 years and 7.99% for 5 years and are likely to be lower very soon. That's $575 per week for a $350,000 home fixed for 3 years, 592 per week fixed for 5 years. Don't forget that rent has gone up tremendously in capital cities. Re: First Home Owners Grant Increased, House Prices Next? 4Oct 17, 2008 11:13 am thlo The $7000 increase makes a world of difference in the typical first home price bracket of up to $500,000. It is a significant increase to their deposit. The increase in the grant may even allow first home buyers to buy a $400,000 property with an approved 97% home loan and no saved deposit. I'm sorry...I may be "fiscally conservative" but if the go-no go decision on the purchase of a half a million dollar house rests on $7000 you seriously need to re-consider your thinking... ...if your are that financially marginal one little thing goes shytsen and you're in deep do-do...something a mortgage broker doesn't have to think about Re: First Home Owner Grant now $24000! Sydney House Prices Next? 5Oct 17, 2008 11:23 am Oh TDL - you are sooooo old and conservative Don't you know that you should be able to get everything you want now - don't wait for it!! Oh hang on isn't that how the world got themselves into this big pile of doo doo? (of course this is a very simplistic view but one I garnered from 4yrs of being a home lending manager!!)
I don't know how any lenders (and this includes my own employer) can justify letting someone purchase a home with no record of savings and just the FHOG as a deposit - very dangerous. And back to the original post - yep prices will probably increase. That is what happened the last time when the FHOG was increased to $14k for new builds - we saw a marked increase in the building of homes here in Newcastle so am guessing it was also in other areas as well. First Home Owners Grant Double $21000 / Sydney home prices 6Oct 17, 2008 11:27 am Buying a home is the decision of a home buyer, and the decision to lend is the lender's.
Believe me, I have a mortgage too. I made the decision to buy before I was in the lending business and the broker didn't make me buy a house. I bought it because I decided that paying rent for a life time will not help you own your home. I respect your view that a mortgage is not for everyone, rent is not cheap either. Re: First Home Owner Grant now $24000! Sydney House Prices Next? 7Oct 17, 2008 11:32 am Yep, I agree that the rates will going down very quickly.. Even some of the expert claims the rates could be nearly 0% in the near future!! But the thing is, a lot of people will be unemployed if the current economic doesn't get better. If they unemployed, how do they gonna pay their mortgage repayment. They need money to pay off the loan...
About the property price, if Supply > Demand then what happen to the price? Only God knows... Re: First Home Owner Grant now $24000! Sydney House Prices Next? 8Oct 17, 2008 11:37 am the rates are going down, but lets not all be naive and think they will never ever go back up again. I would not be paying 500.000 for a home just because the FHO grant was doubled and the rates are being dropped. They may think they can afford it now, but "hello" what happens when rates go back up to 8 or 9 %. If at first you don't succeed, try, try again. Then quit. There's no use being a damn fool about it. W.C. Fields Brought Established. First Home Owners Grant to Double, $21000 9Oct 17, 2008 11:39 am Well T1ms, there is an alternative if that happens. We can all move to the town in Queensland where they are selling serviced land for $1.
Re: First Home Owner Grant now $24000! Sydney House Prices Next? 10Oct 17, 2008 12:22 pm thlo I respect your view that a mortgage is not for everyone, rent is not cheap either. I have a mortgage to and I've never rented...but I would not get into a $500k mortgage if it depended on a $7000 grant...I've always worked on single income, 10% interest, and 33% of disposable income as mortgage. If I could afford it get into the deal then it's a go, if not then it's a no go. My bank manager thought I was nuts to assume interest rates were going to get anywhere near 10%...well if the "meltdown" hadn't occurred we would have come close....and we will be there again. But then maybe that's why I took the less travelled path. Purchased and lived in a two bedroom flat for four years, sold, bought a block in what was then "crappy" Point Cook when everyone was paying twice as much on the other side of Melbourne, built a modest house (24 squares) lived there for almost 10 years, and when we recently upgraded we only went to an established 30 sqs (small by todays standards) on a larger block. I don't begrudge anyone their FHOG - get what you can - but relying on $7k for a $500k debt.... thlo and the decision to lend is the lender's Well based on the current circumstances some of those judgment's may have been a bit poor...certainly our lenders are more conservative than those in the US...but I'm sure some of the lending practices will change...like "we'll add in the price of landscaping, driveways etc so that you can borrow more"...the fast track to negative equity. First Home Owners Grant Double $21000 / Sydney home prices 11Oct 17, 2008 12:36 pm TDL, your timing was good, buying before the trend. These days (for the last 4 years) in Sydney, the cheapest free standing house is $250,000 and that's in a suburb where you are not likely to get much sleep. And $500,000 will not buy you a mansion either, it will just get you a similar house in a better location. Ironically we have large areas of rural land in North West Sydney along established train lines which are not being re-zoned and sub divided. Even if they were, no-one is going to sell you residential land for less than $220,000 anywhere in Sydney.
Re: First Home Owner Grant now $24000! Sydney House Prices Next? 12Oct 17, 2008 12:53 pm thlo TDL, your timing was good, buying before the trend. More like ignoring the trend... ...and working out what I was comfortable with. Always knew that flats, land, house values would go up but didn't buy on the basis that I plan to increase my purchase by x% in x years. Apologies I've taken this thread well OT...short answer most of the FHOG initiatives have coincided with an increase in housing prices...we build about 30,000 less houses that what population growth requires (I think that's correct)...there may be a drop off but I think ye olde supply vs demand will mean that even if house prices drop a tad they keep rising maybe at a slower rate in the short term. Re: First Home Owner Grant now $24000! Sydney House Prices Next? 13Oct 17, 2008 2:37 pm That's assuming of course that the First Home Buyers are actually looking at that type of pricing in the market.
My husband and I could service a 450k mortgage but decided to look further out and ended up buying for 250k (but 10kms further out than we were originally prepared to go). We are just putting our whole grant towards the mortgage - and that will be almost half of our interest repayments for the year. 14k would have been nearly the whole years worth of interest repayments. We just want to clear the mortgage as quickly as possible and have a nice place to live. There's not much point for us having an awesome place to live if we're drowning in debt for 20 odd years. But that's us. And we are the dreaded 'Gen Y'. Go figure Re: First Home Owner Grant now $24000! Sydney House Prices Next? 14Oct 17, 2008 2:52 pm Quote: These days (for the last 4 years) in Sydney, the cheapest free standing house is $250,000 and that's in a suburb where you are not likely to get much sleep. And $500,000 will not buy you a mansion either, it will just get you a similar house in a better location. Ironically we have large areas of rural land in North West Sydney along established train lines which are not being re-zoned and sub divided. Even if they were, no-one is going to sell you residential land for less than $220,000 anywhere in Sydney. $250k buys in Sydney - half a studio apartment or car parking space in the city, a 1-2 bedroom unit in the outskirts of the west (eg Blacktown), not even a house in the real west/rough areas - Mt Druitt, Plumpton, Whalan $500k buys a modest old studio apartment in the city, a 3 bedroom apartment in the middle ring, a 3 bedroom house in the outer suburbs. Though I'd be interested to see what land you're talking about in NW Sydney - the land along the line at Schofields, Riverstone etc is all earmarked for re-zoning as part of the NW growth corridor. Just that developers aren't carving it up yet - they're trying to sell out places like Nelsons Ridge, Ropes Crossing etc first. After 4 years - we're in! First Home Owners Grant Double $21000 / Sydney home prices 15Oct 17, 2008 4:57 pm Stone cutter. Yes we are talking about the same areas. Your blog is about the development near Dean Park Blacktown. Are you in real estate or developments?
Re: First Home Owner Grant now $24000! Sydney House Prices Next? 16Oct 17, 2008 5:14 pm hi thlo - no - we're building a house in the area. but we've been waiting over 2 yrs since putting our holding deposit on the block!
there is plenty of farm land along those areas - and I can imagine a complete change in the landscape in the next 10-15 yrs (as long as we can get out of this mess we're in) If people want a house & land package with real value - I recommend One Minto - an older area being redeveloped. The blocks of land look decent - I think it's house and land for around $300k - which is very reasonable for it's location. After 4 years - we're in! First Home Owners Grant to Double, $21000 17Oct 17, 2008 5:23 pm karol My husband and I could service a 450k mortgage but decided to look further out and ended up buying for 250k. There's not much point for us having an awesome place to live if we're drowning in debt for 20 odd years. But that's us. And we are the dreaded 'Gen Y'. Go figure karol, you are 1 in a million. Very prudent. If I am not wrong, you would rather use your savings to build a portfolio of cheaper investment properties and wait for capital gain. I have seen customers who have accumulated 5 properties in a few years on an average salary just in that manner. stonecutter1309 hi thlo - no - we're building a house in the area. but we've been waiting over 2 yrs since putting our holding deposit on the block! If people want a house & land package with real value - I recommend One Minto - an older area being redeveloped. The blocks of land look decent - I think it's house and land for around $300k - which is very reasonable for it's location. hi stonecutter, you are the first person who told me about placing a deposit on that development, I drive past it everyday I thought it was never going ahead. Isn't this the Greg Norman one, where they are going to fly golfers in, something or rather? That should be good for the area. Re: First Home Owner Grant now $24000! Sydney House Prices Next? 18Oct 17, 2008 5:39 pm stonecutter1309 (as long as we can get out of this mess we're in). what? Are you having problems? Internal and External Building and Colour Consultant Online - Worldwide http://www.denovoconcepts.com Re: First Home Owner Grant now $24000! Sydney House Prices Next? 19Oct 17, 2008 7:08 pm Michelle, what's that picture you are using? A mantle piece with something on it? Re: First Home Owner Grant now $24000! Sydney House Prices Next? 20Oct 17, 2008 7:21 pm My fireplace
Like ⋅ Add a comment ⋅ Pin to Ideaboard ⋅ as of today...... Like ⋅ Add a comment ⋅ Pin to Ideaboard ⋅ Internal and External Building and Colour Consultant Online - Worldwide http://www.denovoconcepts.com Hi all I am looking to run a water line under my concrete footpath which is directly next to my home, was seeing if this is possible without cutting the entire section… 0 20164 Tradie may sit at home but will need to get house plastered as well or will you sit it out? 6 9922 i imagine you also have another contract with an architect? and yeah, whatever other's said about special conditions and appendices 16 15976 |