Here are some insights from our property experts that could make your buying journey easier in 2020.
REA Group’s executive manager – economic research, Cameron Kusher, says knowing when it’s the best time to buy depends on individual circumstances. But, for those with means to buy a home, now could be the ideal moment.
“For those with steady employment and job security, the cost of borrowing is at record lows and likely to remain low for a number of years,” Kusher says.
“If you have the means and the intention to hold on to the property for some time, it is definitely a good opportunity to purchase.”
St.George Bank general manager Ross Miller says for those who couldn’t previously afford a certain type of home or specific area, there are some great opportunities.
“With the banks offering record low interest rates on home loans, this may give home buyers the opportunity to find a place they’re able to afford in an area that wouldn’t have been possible 12 months ago.
“Our research has also shown the current economic situation has uncovered a pocket of property-purchasing optimism among renters. We found that nearly half of all Australians are thinking now may be a good time to buy and are closely watching the market to see if there will be further price falls. Three in every five renters said they are closely monitoring further price reductions and considering their chance to purchase.”
The main challenge for those looking to buy is that many sellers are holding off putting their properties on the market. However, Kusher says that makes it the perfect time to get stuck into your research and make preparations.
“The volume of properties for sale is low,” Kusher says. “Consumer confidence is recovering, but possibly not yet to the point at which most people are ready to transact.
“Now is a great time for people to be researching what sort of property they want. Whether that research be about specific suburbs and property types, or a new home they may want to build or purchase, it is certainly an opportune time to be undertaking detailed market research.”
Mortgage rates remain low, with the Reserve Bank stating they will maintain low cash rates for some time. This is a boon for those thinking of getting a loan for the first time.
Another advantage is that virtual home inspections and an online paperless home loan process means you can apply, and be approved, for your loan from your own home.
Digital innovations are making the home buying process more accessible, says Miller.
“Our research told us that a third of buyers would consider buying via an online auction,” he says. “Australia’s younger generation, in particular, are not feeling caught up by current restrictions and millennials were twice as likely to inspect properties virtually and purchase via an online auction.
“Fortunately for home buyers, pretty much every step of the home buying journey can now be done online. I think many people have realised just how easy and convenient it can be.”
There are a range of financial incentives to help you crack the market right now, especially if you’re a first home buyer.
First home buyer schemes continue, with each state offering different incentives. Most states offer first home buyer grants for newly constructed homes, while many also offer stamp duty concessions and exemptions.
The federal government introduced the First Home Loan Deposit Scheme last year, allowing some first home owners to buy a property with a 5% deposit – without the need for lenders’ mortgage insurance.
To complement the government’s scheme, St.George Bank has reduced its Lenders Mortgage Insurance to $1 for eligible first home buyers with a Loan to Value Ratio up to 85%. Meaning if you potentially miss out on a spot to apply for the First Home Loan Deposit Scheme, an option to save up to 15% of a deposit is also available.
Most recently, the government introduced the HomeBuilder grant, which gives $25,000 towards the construction of a new home or renovation.
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