Smart tenants buy now
ENTERS have the best chance in a decade to upgrade to home ownership, as the cost of servicing a mortgage falls and first-time buyers benefit from government grants, a leading mortgage insurer says.
QBE Lenders’ Mortgage Insurance Ltd chief executive Ian Graham says the Federal Government’s boost to the firsthome owner grant and 45-year-low interest rates have made buying a home more attractive than renting.
‘‘While there is significant uncertainty in relation to employment, an increasing number of first home buyers who are confident about the future have decided the time is right to take advantage of government incentives, low-interest rates and attractive housing prices,’’ Graham says.
Conditions supporting a jump from renting to owning a home are the best since the late 1990s, according to QBE research conducted by residential property forecaster BIS Shrapnel.
The research shows that by June this year, the cost of renting in Melbourne will be more than half way to the cost of paying off a median-priced home.
Median weekly rents in Melbourne relative to mortgage repayments will rise to 66 per cent, from about 40 per cent last year.
Last calendar year rents rose 8.4 per cent, the fastest annual pace since 1989, Australian Bureau of Statistics data shows.
But house prices fell by an average rate of 3.3 per cent across Australia in the year, the biggest annual fall in 23 years.
Graham says first home owners have great incentives to buy property.
‘‘The first home buyer grant scheme has helped first home buyers OMEN are saving and paying off credit cards, a Citi Fin-Q survey of 200 women has found.
‘‘The results show females are taking very practical steps in preparation for the bad times ahead,’’ investment specialist Tania Browne says.
The survey found women were saving more in case they lost their jobs. In 2007, women had savings to get over the deposit hurdle and is driving new lending inquiry/home loan approvals to record numbers,’’ he says.
Last October, the Federal Government doubled the first home owner grant to $14,000 for established dwellings and tripled it to $21,000 for newly built homes.
Since September the Reserve Bank of Australia has cut the cash interest rate by 4.25 percentage points to 3 per cent, a 50-year low, while commercial banks lowered their standard variable mortgage rates by more than 3.75 percentage points.