If you’re a first time home buyer you’re probably going to feel overwhelmed and find the entire process a little daunting. There is a lot you need to know before you can buy your first home, let alone know if you’re ready to buy a home.
The most important thing before buying a home is plenty of research. Research is what will allow you to make a smart and educated decision. If you do this first then you’ll feel much more confident buying your first home than what you otherwise would.
The Real Estate Institute of Australia (REIA) says adjusted data released on February 11th on Australia’s first home buyer levels shows a still disappointing figure,
REIA CEO, Amanda Lynch says, “REIA has previously lobbied the Australian Bureau of Statistics to review the method used to estimate first home buyer levels and we were pleased to see the release last week of its long-awaited discussion paper.
However the adjusted figures released today do little to ease concerns within the industry that this vital group is dropping out of the market.”
“The figures shows first home buyer levels stand at 14.5per cent for December. While the revisions have increased the proportion of first home buyers by around two percentage points, the figure is the lowest since May 2004 and shows a steady decline since May 2012.”
First home buyer FAQs: Buying your first home can be a daunting experience; after all it’s a big commitment and involves a lot of money. To help you on your journey, we answer some of the most common questions asked by first home buyers.
How much money will I need?
At a minimum, you will need a 10% deposit plus enough funds to cover legal fees, a building inspection and stamp duty.
If you buy a property with a deposit of less than 20% of the purchase price, most lenders will require you to take out mortgage insurance as well.
Is it better to save up more or buy now?
If interest rates are low and the market is rising, the growth in property prices will usually outstrip your ability to save.
That means it’s often better to purchase your home as soon as you can afford it. First home buyer FAQs.
Where should I buy?
The best location is different for every homebuyer, depending on their needs.
Start with the locations you would like to live in and where it’s convenient for you to travel to your work and to visit family and friends.
Real Estate Institute of Australia (REIA) President, Mr Peter Bushby says the November 2012 housing figures released by the Australian Bureau of Statistics (ABS) show that the modest response to the interest rate cuts of May, June and October has continued.
Housing finance figures for November 2012 show, in trend terms, that the number of finance commitments has increased by a very modest 0.4 per cent, following the 0.5 per cent increase in October.
If refinancing is excluded, the increase in trend terms for November is 0.4 per cent, compared to the October increase of 0.6 per cent and is the smallest increase for the last seven months.
“In trend terms, increases were recorded in Queensland, Western Australia, Victoria, the Northern Territory and the Australian Capital Territory. The largest increase was in the Northern Territory, up 2.1 per cent in trend terms whilst declines were recorded in South Australia (0.6 per cent) and Tasmania (0.5 per cent).
If the global financial crisis has made Australians more savings-aware, then first-home buyers are taking it one step further by increasing their minimum deposit and waiting longer to buy.
The latest RAMS First Home Buyers’ Pulse Check Survey 2012 also showed the importance of family support, with 53 per cent of first-home buyers saying they had asked relatives to help them put together a deposit.
More than half (55 per cent) said they were living at home while saving to buy, including those who intended to buy in the next three months.
Bigger grants for new home purchases may fail to revive Queensland’s ailing construction sector, the Real Estate Institute of Queensland (REIQ) says.
The Newman government’s first budget will more than double the grant for first home buyers who purchase new properties, to $15,000.
But it will scrap a $7000 grant for first home buyers purchasing existing homes.
The government says the changes are part of its plan to stimulate activity in the ailing construction sector.
But REIQ chief executive Anton Kardash says the government should brace itself for disappointment.
He says history has shown first home buyers prefer established homes, even when more generous grants are available for new properties.
He said that during the global financial crisis, the best grants deal for existing homes was $14,000, compared with $21,000 for new properties.
“But if you look at the data for that period, 76 per cent of people still bought established properties,” Mr Kardash told AAP.
“Despite being offered an extra $7000 on new properties, people just opted not to do that.”
He noted there was little available in the new home market for $350,000 or less – the price bracket where first home buyers were active.
He said the loss of the $7000 grant for established homes could also hit activity in that sector, which had been one of the few glimmers of hope for agents in recent times.
He said it was disappointing the Newman government had sought the views of the Master Builders Association on the changes to the grants program, but had not consulted the REIQ.
The Property Council of Australia, which represents property developers, investors and managers, welcomed the changes and said they would help stimulate construction.
“A dollar spent on a new dwelling has a significant and far-reaching multiplier effect in the community, particularly in terms of jobs and retail spending,” Queensland executive director Kathy MacDermott told AAP.
The council said it was hoping the government would use the budget to announce a comprehensive review of all state taxes.
“We do need major reform around our property taxes, including stamp duty,” she said.