Now is not the time to give up on your dream of owning your first home, writes Law Graduate/QLD Property Law Paralegal Raphaelle Worrall.
If you were looking to purchase your first home, the spread of COVID-19 and regulations around social distancing and border closures may have cast a dark shadow of uncertainty over your hunt for a new property. However, experts have argued that if you are a First Home Buyer with job security and you are ready to buy, now is the perfect time.
Five reasons why First Home Buyers should buy during Covid-19
1. Property investors have stepped back
Before COVID-19, a highly competitive property market and record sale prices were well over expectations for First Home Buyers in Queensland and New South Wales. Investors were not only looking to invest in similar types of properties First Home Buyers were considering, but their deep pockets were forcing property prices up. However, with the introduction of the six-month moratorium on evictions in Queensland and New South Wales, it seems property investors have stepped back from the market. This has provided First Home Buyers with more opportunity to enter the property market.
2. Interest rates are at record lows
Amidst the emerging challenges brought by COVID-19, in March, 2020, the Reserve Bank of Australia (RBA) made the unprecedented decision not once, but twice, to cut the official cash rate to a record low of 0.25 per cent to help support the economy. For those who have long-term job stability, it’s an excellent time to borrow.
3. Lenders need business
In response to the emergency rate cut by the RBA, most lenders have passed on interest rate cuts to their home loans. The big four banks have offered lower fixed-rate home loans for new customers and the Australian Prudential Regulation Authority (APRA) has dropped the required “buffer” from a minimum interest rate of 7 per cent to 2.5 per cent. This means lenders may be more inclined to grant loans to First Home Buyers who are in the position to buy.
4. Property sellers are willing to meet the market
Understandably some sellers have withdrawn their properties from the market in response to COVID-19. However, there are still people who are eager to sell, or who have been forced to sell due to moving to retirement living, court orders or bankruptcy. The urgency to sell, paired with the declined activity of property investors, has prompted sellers to be more willing to listen to the market and consider competitive offers made by First Home Buyers in Queensland and New South Wales.
5. Government assistance for First Home Buyers
At this current time, there has been no change to the QLD and NSW Government First Home Owner Grant (FHOG) Scheme and Stamp Duty exemptions. In response to COVID-19, the Federal Government has extended the time-frame for finding a home from 90 days to 180 days for the First Home Loan Deposit Scheme (FHLDS). This can help eligible First Home Buyers in Queensland and New South Wales enter the property market with a deposit as low as 5 per cent.
How can Attwood Marshall Lawyers help?
As an essential business unaffected by the lock-down directives, we remain open for business. We continue to provide our legal services to the same exceptional standards. Our offices are located at Kingscliff, Coolangatta, Robina and Brisbane. Our 24/7 phoneline is: 1800 621 071.
Read our Covid-19 statement here for more information.
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