In our first installment we looked at the trend of unlikely areas receiving an upswing in home sales and interest as a result of the First Home Owners Grant and boost. Here we will continue to explore this unusual and interesting phenomena.
First Time Home Buyers Make Up The Bulk Of Those Purchasing Real Estate
First time home buyers are making up a large percentage of house hunters right now as a result of the Government First Home Owners Grant. First time home owners can get an added boost of $21,000 for newly built homes and $14,000 for already existing homes through the end of September.
Extra Money Helps New Home Buyers Afford A New Home
This extra bit of money offered to first time home buyers has helped many of them to realize their dream of owning a home and has also helped to stimulate the market in lower end areas that were faltering before. These areas tend to be more affordable to people who are taking advantage of the first home owners grant money. The faltering upper end of the market has only increased the boost to the lower end of the market.
Lower Interest Rates Add To Market Boost
Another reason why the lower priced housing market is seeing such an increase in property sales is due to lower interest rates and a desire by many Australians to have smaller homes and easier to manage mortgages. These factors help to boost the sales on the lower end market homes. These same factors are hurting houses that are priced on the higher end of the market. Houses with as price tag of 1 million dollars or more have seen a significant decrease in sales over the last year.
Property Options Australia
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Hi Sean,
I agree that the first homeowners grant has caused a lot of interest in properties at the lower end of the real estate market. The slowing economy has meant that luxury homes have taken a hit.
In the last twelve months there were some of the lowest interest rates that have been seen in years. It makes sense that it’s a great time to buy and take advantage of the government grant at the same time.
The interest rates have been incredibly low but are on the way back up now. I wonder why low interest rates has not helped the upper end of the real estate market because it would have made these houses more affordable. There must be other factors involved here.