First home buyers are rejecting grant

An interesting post I read today states that real estate agents are starting to see a decrease in the number of first-home buyer’s grants being utilized in the hopes that prices will fall.

Some potential first home buyers are now of the opinion that they can save money by waiting until the grant expires at the end of the year and buy after prices drop.

Accourding to data from the Australian Bureau of statistics showed that the number of people taking up the first home owners grant in NSW dropped from over 6,900 in June to just over 6,600 in July.

Hmm I thought the opposite would be occuring. Could this be true?

Daniel Kanoon
 
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I know a few people are waiting for the FHOB to end before buying their first home because of the inflated prices at the lower end of the market.

I guess they can join the queue along with investors and upgraders who are also waiting for the grant to end and for prices to come down a little (which may or may not happen).
 
For my entire adult life I've friends who are 'waiting for the market to drop' before they buy. Some are still waiting. Quite frankly I don't think most FHBs know much at all about property, other than they really want to get in, or are finding every excuse not to.
 
It's not surprising considering it was late in the peace that the Government extended the grant. August might have more.
 
I guess I agree that the FHB boost inflated prices almost immediately and I actually suggested to a family member some months back that they hold off purchasing until after it ended. They ended up buying something last month anyway. I wasn't expecting much of a flow on after FHBs, but agents in my area are now saying that there are 5-8 investors for every FHB!
 
I wasn't expecting much of a flow on after FHBs, but agents in my area are now saying that there are 5-8 investors for every FHB!
In my neck of the woods I'm seeing about 20% FHBs, 30% investors and 50% upgraders (having sold to FHBs). FHB finance apps are down, investor finance apps are up. All points to investors and upgraders back in supporting the market and price rises :)
 
I'm a FHB and I'm trying to settle a prop atm before the month expires. 16k, why wait for something that may not happen!? ( prices drop )... Sure I could hang out an extra few months and still get 12 or whatever it is, but I'd rather utilize the max now..

It seems a lot of people are itchy to sell because they think once the FHB expires sales will drop. Therefore offers are more neg. I could be wrong, thats just my perspective....
 
I`ve looked into a few houses in Brisbane at the lower end.
Empty real estate offices, three homes I have looked at all had first home buyers sign up on them, some had fallen through with finance twice.
I was told by an agent there were many investors coming onto the market but seen none, not a single one.
Don`t believe the hype from my perspective the brisbane lower end at least is totally being propped up by first home buyers.
We have the highest interest rates in the world and by all accounts they are going only one way.
Some have said that the first home buyers are dropping off I believe this is not correct, they are now seeing the end of the grant and jumping in but jumping into what?, they may have a lot to thank the banks for in declining thier loans when all is said and done, after all banks do not decline loans without good reason, they are worried.
Property has had a real good run for a long while now.
 
Around the Frankston area there are very few listings coming on the market, even though it's Spring and all that.

Anything under $340k is still a very tight market with bugger-all to buy of any quality.
 
Are you saying they are the only 3 types of buyers in the market?

Your credibility is getting stretched by the minute prop.

In my neck of the woods I'm seeing about 20% FHBs, 30% investors and 50% upgraders (having sold to FHBs). FHB finance apps are down, investor finance apps are up. All points to investors and upgraders back in supporting the market and price rises :)
 
Hi, what is the fuss about? There's really no relevance in the numbers. In June it's 6900, in July 6600. What drop is that?

And how can one infer from that that FHB are rejecting the grant in the hope that prices will drop?

Nonsensical piece of writing.

KY
 
Are you saying they are the only 3 types of buyers in the market?

No, not really evand, although I can see how you can deduce that since my %'s add to 100%.

All I am saying is that from the Open for Inspections & auctions I go to each week-end, and the night-time mid-week auctions I attend, I am seeing less and less FHBs & more and more investors and upgraders. I am also seeing prices go $20-25K over what I think the properties (in the $400K range) are worth and can be justified by the comparable sales figures I have.
 
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In my neck of the woods I'm seeing about 20% FHBs, 30% investors and 50% upgraders (having sold to FHBs). FHB finance apps are down, investor finance apps are up. All points to investors and upgraders back in supporting the market and price rises :)
Thanks for that constructive info Prop.....

The ABS agrees with you ;) - finance to FHB is down, but upgraders are taking up the slack. In fact, housing finance is at a historic high...

 

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For my entire adult life I've friends who are 'waiting for the market to drop' before they buy. Some are still waiting. Quite frankly I don't think most FHBs know much at all about property, other than they really want to get in, or are finding every excuse not to.

How old are you? If in your thirties then you 'entire adult life' doesnt count for much sorry after coming of one of the biggest ever recorded property explosions....There in lies the problem-we have a whole genration or two that have only ever know property to increase at close to, if not more than double percentage figures annualy.

We all know this is however not the norm, so it will be interesting when we get back to 'normal' growth rates?

God Im turning more bearish day by day...:eek:
 
we have a whole genration or two that have only ever know property to increase at close to, if not more than double percentage figures annualy.
Really? :confused: For the last 6 years or so we've had very little growth (if any) and in fact many declines. This, by the way, is perfectly normal in any RE cycle. If you have a look at the attached graph of Melbourne medians from 1966 to 2001, ("covering the last generation or two") you can see some flat periods, you can see some growth spurts and you can also see some years of falling prices. But if you look at the overall trend lines you'll see increase. I don't think that amounts to "close to, if not more than double percentage figures annualy".

so it will be interesting when we get back to 'normal' growth rates?
Which are? :cool:

Im turning more bearish day by day...:eek:
You might feel more comfortable on the other forum where you can hang out with others who share the same views as yourself :rolleyes: You are, in my view, quite welcome to hang around and post your views. It does help bring balance to the argument - but you don't have to be extreme to bring that balance.
 

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after all banks do not decline loans without good reason, they are worried.
Property has had a real good run for a long while now.

From CBA newsletter. Banks don't worry mate - they just read it as it is.
Over the first five months of 2009 Australian residential property values increased by 3.9 per cent, virtually wiping out the losses recorded across the market in 2008. Following 10 months of falling prices which started in February last year, housing values started to improve in January this year clawing back the losses over just five months.

The recovery in market conditions can be attributed to a variety of factors. Many commentators suggest that first home buyers are largely responsible for the improvement in market conditions. This is partly correct; the number of buyers taking advantage of the First Home Buyers Grant is at record levels and first home buyers currently represent the largest proportion of the market than ever before. However, these buyers account for less than 30 per cent of the entire market so their affect on overall market conditions isn’t dramatic.

The most important factor is the fact that housing affordability has returned to levels not seen since 2002 thanks to mortgage rates being cut from 9.6 per cent back in August 2008 to 5.75 per cent in June this year.

Additionally, we can thank Australia’s robust banking sector and the fact that, as a nation, we are experiencing record population growth that has created an unprecedented level of demand for housing. The Australian population increased by 2.9 per cent over the 2008 calendar year – growth this high hasn’t been witnessed since the baby boom.

Looking forward, most of the leading indicators are pointing towards continued modest increases in national property values.
 
Really? :confused: For the last 6 years or so we've had very little growth (if any) and in fact many declines. This, by the way, is perfectly normal in any RE cycle. If you have a look at the attached graph of Melbourne medians from 1966 to 2001, ("covering the last generation or two") you can see some flat periods, you can see some growth spurts and you can also see some years of falling prices. But if you look at the overall trend lines you'll see increase. I don't think that amounts to "close to, if not more than double percentage figures annualy".



You might feel more comfortable on the other forum where you can hang out with others who share the same views as yourself :rolleyes: You are, in my view, quite welcome to hang around and post your views. It does help bring balance to the argument - but you don't have to be extreme to bring that balance.

Ohhhhh kayyyyy, take yer blinkers off for starters. I dont want to be pigeon holed as a property bear, but at the same time like a little 'fact' with my weaties in the morning.

Seeing you like graphs, how about you look at a couple more from the good ole RBA...As you will see, and as anyone will atest, the last 18 years have shown way above average growth. Sustainable...well you seem to think so?

As for generation-I would consider the people born between 75-85 to be the generation or two most at risk. They have entered the work force in boom times and have only known booming property prices..

I hardley consider my comments, especially the initial ones 'extreme'...:rolleyes:

As investors surely we should be looking at all aspects, not just blinkerd, pro property. Heck if property is going to drop I want to be ready to capitalise, not go 'ah well I bought 15% over value, doesnt matter Im in it for the 'long' haul'.....
 

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As investors surely we should be looking at all aspects, not just blinkerd, pro property.
Look you're right. We should look at all aspects. I'm not just pro property. I own shares. I trade options. Different vehicles for creating wealth for different times IMO. There are times when I would not invest in property, but those times are not now IMO. But that is all it is - my opinion.

Heck if property is going to drop I want to be ready to capitalise, not go 'ah well I bought 15% over value, doesnt matter Im in it for the 'long' haul'.....
Human beings are inherently bad at timing an entry point into any market. I doubt if you are any different.

But the good thing is that you have an opinion. It might be right, it might be wrong, only time will tell. Everyone is responsible for their own actions.
 
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