Good Time for First Home Buyers, Says RBA  

Buyers, Investors, Property Market,  Buyers and sellers

Low interest rates, government incentives and predicted positive economic growth make it a “good time for first home buyers”, according to the Reserve Bank of Australia (RBA) Governor, Philip Lowe. However, when it comes to buying your first home, there are several factors you should consider before leaping into home ownership. 

We’ve broken down the pros and cons of the above three factors so first home buyers can better understand how these elements can help or hinder them when purchasing property. 

PREDICTED POSITIVE ECONOMIC GROWTH 

Pros: Low-infection rates and the prospect of a COVID-19 vaccine coming soon are just two factors influencing Australia’s economic recovery. While Australia emerges from recession, Lowe, RBA Governor says: “Economic recovery is under way and recent data [has] generally been better than expected. Financial conditions remain accommodative around the world, with bond yields near historically low levels. The improvement in risk sentiment has also been associated with a depreciation of the US dollar and an appreciation of the Australian dollar. However, Lowe says economic growth and recovery is likely to be “uneven and drawn out”, and will be largely dependent on monetary and fiscal policies. 

Cons: Despite predictions of positive economic growth, Australia’s unemployment rate still remains a concern for some first home buyers. While employment growth has increased over the last few months, under and unemployment is predicted to rise as businesses restructure in the wake of COVID-19. Moreover, 900,000 businesses are still reliant on the Federal Government’s JobKeeper wage subsidy program, with Treasurer Josh Frydenberg predicting ‘some businesses will not survive’ at all once the program ceases at its currently legislated end date of March 28, 2021. In light of this, Dr Lowe suggests it’s a good time for first home buyers with “income security” to buy.  

LOW INTEREST RATES 

Pros: The official cash rate, which currently sits at a historic low of 0.1 per cent, means it’s never been cheaper for first home buyers to access home finance. In fact, interest rates are so impressive that in some regions of Queensland, home repayments are cheaper than rental prices. Rebecca Herbst, Sales Manager at Bees Nees says favourable financial conditions have made it the perfect time for potential first home buyers sitting on the fence to take action and buy now. “Interest rates are still low, and prices have been stable,” says Herbst. “However, we are seeing signs of the market price increasing, so [first home buyers] are best to get in now.”  

Before taking advantage of low interest rates, buyers should ensure the rate cut is wholly passed on by their lender of choice. The following table produced by Canstar shows the latest rate statistics. 

Owner-Occupier Principal and Interest Home Loans as at 4 January 2021

Cons: Low interest rates spell mostly good news for first home buyers, but there is a negative that most discount the impact on savings. For obvious reasons, lower interest rates = less rewards passed on from the banks for saving, which in turn can slow down first home buyers trying to save for their house deposit, or even deter them from saving at all. 

SEE ALSO: What Does The RBA Cash Rate Cut Mean For the Queensland Property Market?

Love Property? Make it your career!

GOVERNMENT INCENTIVES

Pros: First home buyers in Queensland are eligible for an array of grants, such as the Queensland First Home Owners Grant, Regional Home Building Boost Grant, the Federal Government’s HomeBuilder Grant, the First Home Super Saver Scheme and the First Home Loan Deposit Scheme. The benefits of these schemes do vary, but all have a common goal: to get first home owners onto the property ladder sooner. 

Justin Marsden, McGrath Queensland State Manager said the variety of schemes available have seen an influx of first home buyers coming to the market. “We have seen a rise in first home buyers since HomeBuilder was announced,” says Marsden. “HomeBuilder, along with the First Home Owners Grant certainly give first home buyers significant reasons to get into home ownership now. A number of land releases that qualify for the above have been sold out in record time.” 

ConsWhile purchasing your first home has been made easier thanks to State and Federal incentive schemes, support measures currently do not extend further than construction and new housing. To ensure the long-term stability of Queensland’s property market and to allow first home buyers to get their foot on the property ladder sooner, the REIQ is calling on stimulus measures to be applicable to established housing.  

REIQ CEO, Antonia Mercorella says“Any stimulus measures for the property market must support the whole of real estate for the benefit of all Queenslanders, which includes providing access and choice in established housing. By doing so, it will help drive consumer confidence upward, accelerate our economy and increase the labour market across both construction and real estate, two of Queensland’s largest industry employers.” 

Important disclaimer: This article is provided for general information only, and the author is not engaged to render professional financial advice or services through this article. Readers should satisfy themselves as to the correctness, relevance, and applicability of any of the above content, and should not act on any of it in respect of any specific purchase, investment, or other financial activity without first obtaining their own independent professional financial advice.  

Here’s what others have to say

Very impressed with the trainers that I have had for the past 3 days. Each individual trainer was very helpful and made sure that everyone in the class understood everything before we progressed through the modules.
Shannon Goldsworthy
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04:34 23 Oct 19
I found the REIQ Real Estate Licence Online Training Course was very good, easy to access, with brilliant course materials to read and assignments that really checked on your understanding of the details of every aspect of real estate practise. I enjoyed the course even though it took a few months due to working full time and found the support of the trainers and assessors very helpful and encouraging. Thanks REIQ Training team for helping me through!
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Had Melissa Sullivan conducting the sales registration course for the past two days I have to say I think this woman is inspiring she kept the class focused and engaged throughout the two days. I dont normally complete surveys but felt that I wanted to share that this lady has inspired me to give sales ago and I never thought i would say that as i have been a PM and honestly never thought I could see myself as a sales agent... Thanks Mel for such a great two days
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Adam Milton
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01:52 22 Nov 17
I contacted REIQ, as I wanted to upgrade my real estate licence to a full licence. I have now completed the necessary upgrade and I just wanted to thank all the staff and trainers who were my guides during this time. Particular mention to Rachael Wilschefski who did everything she could to help me and was a joy to talk to, Trudi Fleet was a fantastic support to me and a big thank you to the assessing team. If anyone is considering using REIQ to get their licence or upgrade, I highly recommend using REIQ. Once again, thank you. Helen Knight
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I wasnt sure that I would get through the Agents and Licence course with everything I had on, made an attempt a year ago with another provider that went totally pear shaped but the REIQ course is structured in a way that made sense. While all of their trainers are experts in their field, they offer onsite student support on Tuesdays with Rachel providing the right advice and reassurance to get you there, even if you havent studied for a while. If you've ever wanted a career in Real Estate this is where you get started!
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Great training course was very informative. I feel I gained lots of knowledge and there is a lot of support from the REIQ team online, via phone and in person and am looking forward to starting my career in the real estate industry!
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07:01 02 Oct 19
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02:27 25 Jul 18
I would like to share with you our experience that we have recently had through the REIQ Professional Development Team.We have had an awesome start to 2020 thanks to the great service provided by the REIQ Professional Development Team. Congratulations to Liz who started and finished her Certificate of Registration Course with the REIQ in December 2019. She loved the training, particularly the fact the trainers are experienced and still walk the talk and are active in real estate. Fast turnaround for marking of the assessments with help on hand by way of tutoring if needed meant she could get the Application to Office of Fair Trading for her registration happening quickly. We are thrilled, from start to finish with the course and application to Fair Trading she had her Certificate of Registration within 5 weeks. Really impressed with the training, help and support team REIQ gave Liz and the quick processing time by the Office of Fair Trading.We also regularly use the Property Management Support Service and General Agency Advice Service and believe it offers great value for our membership. The PMSS team provide practical advice by practising property management professionals who can relate to the everyday challenges property managers face.Keep up the good work Team REIQ,
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