Is Now The Time For Property Investment?
There is speculation that the price of new homes is being pushed up by the government grants, which would be enough to convince many to wait until after June 30(when the grant supposedly runs out) when the prices could possibly reduce? A lot of buyers are weighing up whether to make a property investment.
Or should potential first home buyers purchase now with the extra grant money($14,000 and $21,000)?
While some savvy buyers are snapping up well priced investments a lot are still sitting it out on the sidelines. They are waiting before committing to their next property investment or first mortgage.
"The first home owners grant is merely inflating the property prices being paid by the size of the grant" is a common quote!
Many are asking if now is the time to buy first homes or property investment
Some have also said the Government should shift first time buyers' focus to the federal savings deposit scheme. Then they should encourage people to save a bigger deposit before buying and getting big mortgages.
They say it should be mandatory for potential buyers to have a 20 per cent mortgage deposit. This will help reduce loan defaults as well as avoid mortgage insurance at purchase.
The government grants have created a "massive market distortion" and over-inflated house prices in first home buyer markets.
"It could be attracting home buyers that would otherwise be unable to afford to buy,"
"Not only are first home buyers propping up the housing market with their government subsidy but they are doing it mainly with variable rate mortgages, which is a recipe for disaster," says Money Managers managing director Kevin Bailey
Fixing at our forty-six year low fixed interest rates to avoid being exposed to high rates in the future could possibly negate this.
What do you think? Would you buy now?