More great news for first home buyers looking to purchase land. The 2009/20010 Queensland state budget revealed an increase to the transfer stamp duty exemption threshold for first home buyers purchasing vacant land from $150,000 to $250,000, providing savings of up to $5,675. It also extended the concession for first home buyers purchasing vacant land valued at up to $400,000. These measures are on top of the transfer duty exemption threshold for first home buyers purchasing established homes being increased to $500,000 in last year’s state budget.

The Federal Government in their recent Budget announced a six month extension to the First Home Owners Grant (FHOG) boost. The boost, which gives first home buyers an extra $7,000 when purchasing an established home and an extra $14,000 for new homes, was due to end on June 30.

The full boost will continue until 30 September, when it will then be halved until 31 December. After that date the $7,000 first home owner’s scheme continues in its original form.

The extension was met with some surprise, after Kevin Rudd sparked a flurry of interest by earlier hinting the boost would not be extended beyond its original June 30 deadline.

Many first home buyers are taking advantage of this boosted grant. To share some statistics with you, there were 8,818 first home buyers in August 2008, and in March 2009 there were 17,652.

With the Government assistance on offer and record low interest rates, it’s understandable why so many are taking advantage of this opportunity to enter the property market for the first time. Using Housing Industry Association figures, the overall market is at its most affordable for seven years. HIA chief executive Chris Lamont declared that “there has never been a better time to enter home ownership”.

Whilst all this is well and good, the banks have recently tightened their lending policies which have created some new hurdles for prospective first home buyers. Generally speaking, banks now seek a 10% deposit, of which 5% must be from genuine personal savings. There are some exceptions to this though. These recent changes have made getting finance approval much more complex. So the best advice I can give you is to discuss your individual circumstances with a mortgage broker.

For those borrowers who happen to meet the bank’s eligibility criteria, you will be faced with application delays ranging from one week to four weeks. This is because there are fewer lenders in the marketplace than previously. The major banks have a stranglehold over the mortgage market. The latest statistics report the big four banks doing 72.2% of all residential lending. This is up from 57.5% just one year earlier.

Progressing further, the next dilemma borrowers are confronted with is should they take advantage of the low variable interest rates on offer, or choose a higher fixed interest rate for up to the next five years? Indicatively, a five year fixed rate is approximately 1.5%pa higher than what you could get on a variable rate. Initially you’ll be paying more, but will it pay off over future years ??? I’ve got some recent news articles on this subject that I’m more than happy to email to you. Just contact me via phone or email.

I would also like the opportunity to answer any FHOG or finance related queries you may have via this blog, or alternatively you can contact me separately via email at jthomson@smartline.com.au or phone 0740410055. Our website is www.smartline.com.au/cairns

A RISE in the number loans to first home buyers to the highest levels in 18 years, driven by low interest rates and generous government grants, supports an ongoing recovery in the housing sector, economists say. First home buyers represented 26.5 per cent of all loans written for owner-occupied housing in January, an improvement from 25.7 per cent in December. It was the largest proportion recorded since the start of the data series in 1991 and the third consecutive monthly rise, Australian Bureau of Statistics figures show. Overall, the number of new loans for owner-occupied housing increased by 3.5 per cent in January, ABS figures showed. It was the fourth straight monthly rise. Westpac senior economist Andrew Hanlan said households had clearly responded to lower interest rates and the boost to the first home owners grant. “Moreover, the housing finance recovery has gathered pace and broadened in its scope,” Mr Hanlan said. “Upgraders are now responding.” Mr Hanlan said demand for housing finance was expected to rise further in coming months, given the stimulus already in the system.

First-time home buyers are flooding into the housing market to take advantage of the federal government’s increased grants and low mortgage rates, new data suggests. First-time home buyers made up 25.4 per cent of home loans granted in December, the highest proportion since December 2001 - the height of the last major housing boom.
As part of last year’s $10.4 billion economic stimulus package, the government doubled the first home buyers grant to $14,000 for the purchase of existing homes, and to $21,000 for newly built properties, until June. The Reserve Bank of Australia (RBA) had cut its official rate by 300 basis points between September and December, a large proportion of which was matched in mortgage rates. Earlier this month, the RBA cut the cash rate by a further 100 basis points to a 45-year low of 3.25 per cent. Overall, 52,874 owner-occupier home loans were taken out in December, a 6.4 per cent seasonally adjusted increase compared to the previous month. This is the third consecutive monthly increase.
Economists had expected the number of owner-occupier home loans to rise by 3.5 per cent in December. Loans for new dwellings skyrocketed 15.2 per cent in the month, seasonally adjusted, as consumers took advantage of falling interest rates and grants for first time buyers on new homes announced by the government in October. (SOURCE - livenews.com.au and Sydney Morning Herald). Are you or someone you know interested in taking advantage of the First Home Owners Grant and low interest rates to enter the property market? If so, I’d love to help.

Hi There,

Jason Thomson from Smartline here. I am very excited to be the first official “Blogger” on  www.landincairns.com.au . My company Smartline Mortgage Advisers have helped thousands of locals with accessing finance and assisted many into their first home.

Buying land and building a home can be an attractive alternative to buying an existing house or unit. This means that you can build the home that will suit you and your family, however it can be a daunting process with hurdles along the way. The first topic I am going to be discussing on this blog is the First Home Owners Grant, who is eligible, who can access it and what the Federal Government has in mind for ongoing support for first home buyers.

The First Home Owners Grant was boosted  by the Federal Goverment last year to encourage people to enter the property market and to stimulate growth in the housing sector. As first home buyers don’t need to sell existing property to purchase their next home, they form an important part of the entire industry! Basically, the grant can be accessed by anyone as long as they have not owned property before, are an Australian Citizen or permanent resident and are not purchasing the property as an investment (i.e. it will be their principal place of residence).  This blog will help you access those funds and get your foot on the first step of the property ladder. Remember the Government will be stopping the grant in it’s current form in June this year, so now is the time to be asking your questions to access the grant.

Of course if you have other questions on any other items like stamp duty, accessing finance, hidden fees, then feel free to ask, I would be more than happy to answer any questions you may have.

Lets get this blog started!

Regards Jason.