Smart ten­ants buy now

Herald Sun - Property - - Finance -

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.

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