Five reasons Why First-Home Buyers Should Buy Right Now

Five reasons Why First-Home Buyers Should Buy Right Now

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The time is right for first-home buyers. Picture: Dylan Robinson Source:News Corp Australia

Real estate changes as a result of the coronavirus have made for an appealing market for first home buyers.

Here are five reasons why rookie real estate buyers should be spending their time at home during the COVID-19 crisis sharpening their search for their first property purchase and making it happen for them.

Investors have taken a back seat

Less competition is a good thing for first-home buyers. It means the market isn’t sprinting forward and prices won’t be pushed up by keen investors with deep pockets. Traditionally (especially in the cities) investors and first-home buyers go for the same types of property in similar neighbourhoods, such as city-fringe units in palatable price brackets. Since the eviction moratorium, investors have cooled and the result is a quieter playing field for first-home buyers.

Investors have exited the market, leaving more options for first-home buyers.

Investors have exited the market, leaving more options for first-home buyers. Source:Supplied

Interest rates couldn’t be more interesting

It’s never been cheaper to pay off a home loan. Many first-home buyers’ parents or grandparents took on mortgages with interest rates that soared as high as 17 per cent in the late 1980s and early 1990s, but today’s rates are rock bottom. CoreLogic data even suggests that more than a third of Australian properties had estimated mortgage repayments less than local weekly rents.

Lenders are hungry for business

Even before the COVID-19 crisis, lenders had loosened their belts for first-time borrowers. By July 2019, APRA had relaxed restrictions around how lenders assessed a customer’s ability to meet repayments by dropping the required “buffer” from a minimum interest rate of 7 per cent, to 2.5 per cent. As a result it’s easier to get finance than it was even a couple of years ago. Couple that with a loss of interest from investors, and banks are very willing to chat with first-timers.

Opportunities are out there for buyers, despite the coronavirus crisis.

Opportunities are out there for buyers, despite the coronavirus crisis.Source:AAP

Sellers are more willing to meet the market

Let’s face it, a lot of sellers (some accounts say as many as 40 to 50 per cent) withdrew their properties from the market as soon as social distancing measures came in. Many were fearful of how property prices would fare in the coming weeks, or were scared of letting strangers wander through their home. But those sellers who are ready to sell (or have to) are now more prepared than ever to listen to offers.

Government handouts are still on the table

Lockdown laws have changed the way real estate is to be sold for the foreseeable future, but government assistance for first-home buyers has stayed the same. Each state and territory government has its own version of the First Home Owner Grant (and exemptions to stamp duty) which can be found by visiting firsthome.gov.au. On January 1 this year, the Federal government kickstarted its First Home Loan Deposit Scheme, which assists eligible first-home buyers to get onto the property ladder with a deposit as low as 5 per cent. In the wake of coronavirus, the government has extended the 90-day time frame for finding a home to 180 days.

Source: News.com.au