The Time Is Right For First Home Buyers To Jump Into The Market
Thursday April 28, 2011
Higher levels of savings, increasing rents, stable interest rates, a softer housing market and the banks relaxing their lending criteria have all combined to create a unique opportunity for first home buyers looking to get on the property ladder.
Aussie Hornsby Store Franchisee, Alex Ralec, said while many first home buyers had been spooked out of the market, it was time to buck the trend and swoop on some good deals.
He said auction clearance rates have been weak and according to RPData, the *number of homes advertised for sale are at record levels. Other indicators such as the time it takes to sell a home, and the margin by which vendors have to discount their properties are climbing again after plateauing in recent months.
“Market conditions are certainly favourable for first home buyers,” he said. “The large number of properties available for sale on the market has created ideal conditions for buyers to negotiate on price.”
He said there was also considerable pressure on rents, with many home buyers looking at paying weekly rents which may be comparable to loan repayments. “It is worth investigating the options of buying a home versus paying rent to a landlord as potential buyers may be pleasantly surprised.”
He said Australians have heeded the Reserve Bank’s warning about taking on too much debt and have begun to save – which bodes well for home loan deposits. “Banks are also relaxing their lending criteria and lifting their LVRs (loan-to-value ratio) to higher levels, meaning home buyers can have a smaller deposit than has been required in the aftermath of the Global Financial Crisis,” he said.
He said it was wise to visit an accredited broker in order to ascertain eligibility, borrowing capacity and which lender and product may be the most suitable for the borrower’s circumstances.
“Buying your first property is one of the most exciting, and at times scary, things a person can do,” he said. “It’s imperative they enter the world of home ownership on the front foot, with the right lender and the right loan for their circumstances and an Aussie broker can help them achieve that by guiding them through the process from lodgement to settlement,” he said.
“Getting a broker to organise pre-approval before they begin hunting for a home is also a smart thing to do,” he added. “You’ll have a better idea of the type of property you can afford, as well as avoiding any potential hiccups which may occur during the sale process”.
“As it is a buyer’s market, you will be able to make an offer and move more quickly than a buyer who needs to get approval from the bank”.
“Sellers will also feel more confident that they are dealing with a serious buyer, and may be more flexible when it comes to price.”
As one of the country’s largest non-bank providers of financial services, Aussie has a loan book of around $40 billion. There are now over 140 stores and more than 750 brokers across the country ready to help customers get a better deal on their finances.
An Aussie broker will offer guidance, assess eligibility, lodge the application and then support the borrower, whether they have a loan of $100,000 or $1 million through the home loan process. Aussie brokers are available 24 hours a day, seven days a week, at the request of customers who call Aussie Hornsby on 9477 4277.
The 7 first home buyer mistakes to avoid
These are the most common mistakes that first home buyers make. Make sure you don’t fall into these traps:
- Changing jobs or making a major purchase at the same time as applying for finance.
- Not getting your finance pre-approved, and leaving everything ‘too late’ when the ‘right’ property is found.
- Borrowing right up to the amount the lender is prepared to loan you, and then being financially over-stretched.
- Letting emotions take over in the negotiation process, and paying too much for the property—or missing an opportunity to negotiate more favourable purchase conditions.
- Not doing your diligence and checking out things such as council zoning, building approvals and restrictive covenants.
- Buying a ‘do-up’ and then running out of money. Renovation is not a cast-iron route to riches, and if it turns out to cost more than you bargained for, you could be living in squalid circumstances for too long.
- Forgetting to sort out property insurance well before you move in, and forgetting to tell the utility companies!
Go to the Aussie First Home Buyer Guide for more information and other helpful guides.
For further information please call:
Brooke Stoddart
Aussie
(02) 8297 0381
Tim Allerton
City PR
(02) 8916 4848
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