Australian Property Market Heats Up Before Budget Announcement

Post by Sharat on May 12, 2009 · Under Australian Economy, Property Market, banking, home loans, interest rates, mortgages · Comment 

The Australian property market has rapidly heated up with first time home buyers sprinting quickly to make or finalise their purchase due to fears that the Commonwealth Government of Australia ceases with the current regime relating to government grants when it announces its new budget today.

Data released by the Australian Bureau of Statistics shows that the percentage of first time home buyers hit a record high of 27.3 per cent in March beating the previous record of 26.5 per cent which was set during the months of January and February.

The Government has not signalled its true intention, often sending contradictory messages over the Federal grant scheme and whether it intends to continue with the scheme in its current form beyond the July 30th deadline.

As part of the $10.4 billion Federal stimulus package, grants for first time home buyers were doubled to $14,000 for the purchase of established homes and increased threefold to $21,000 for the purchase of new properties. The scheme has been the most successful component of the stimulus package with over 40,000 buyers since the scheme became operational back in October 2008.

The increase in March, marked the sixth consecutive monthly increase in first time home buyer numbers, and the total number of home loans increased in march by a greater than expected 4.9 per cent to 59,793.

Potential buyers have had the incentive of record low interest rates and substantial federal grants which has successfully enticed them into the property market. With the latest cut of 25 basis points, the cash rate has been slashed by 425 points since September, and now stands at half century all time lows.

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