Conveyancing & Property Law - What to make of interest rates, the first home owners grant, renting and housing affordability?

What to make of the free flow of info coming to us by way of our favourite medium revolving around interest rates, the first home-purchasers government grant, rents in Sydney and housing affordability?

 

While some could be forgiven for yawning, well aware this has long been a subject for animated conversation in Sydney, others would know that what gives these particular poignancy is the current state of play and interplay of each of these factors, so let’s look at them briefly.

 

Scanning a number of articles, I find facts and figures about rents in Sydney inconclusive, depending possibly on who is delivering them. The disparity of views seems to come down to rental availability and prices. Leaving the figures aside, do we have consensus that there has been significant rises in Sydney house rents and also there is generally a shortage of rental accommodation?  There has long been an understanding that population growth in the long term would underpin these forces. If so we can state that in effect there is a lessening of the gap between renting and purchasing.

 

As for interest rates, this is more clear cut, we know that they are falling.

 

The good news story is that the government grants from all accounts are an unqualified success for those ever so keen to get a foot in the property door. I am sure it would not surprise our neighbouring states to find that figures released recently by Housing Minister Tanya Plibersek showed that New South Wales resoundingly led the charge to take advantage of the payment – which ranges from $14,000 to $21,000. We do know this is available to 30 June 2009, with the possibility that it may be extended.

 

OK so that covers a bit of ground.

 

 

Ask yourself, is it feasible to purchase with a friend /friends or a sibling? For those of us whose job it is to protect legal interests in property, this need not present a difficulty for potential purchasers, so do consider it, if it will enable you to realise a goal.

 

Next, while I know that prices in Sydney differ enormously and bargains are available, is it an option to buy outside of Sydney? Do we have any tree-changers or sea-changers amongst us? For those keen to do a bit of research here, I would recommend the ABS website, otherwise known as the Australian Bureau of Statistics. Key in a town and cast an eye over the demographics in their clearly presented and user-friendly data. Do bear in mind that to satisfy the criteria for the home-owners grant, you would need to move in within the first twelve months and stay for a minimum of 6 months.

 

I still remember on one of my country travels a few years ago, listening to a local gleefully relay a story about her son and partner who due to the government grant were able to purchase an old house for considerably less than $50,000 while receiving $14,000 from the government grant. They knew it was not a mansion, but they were laughing as they figured they could only win.

 

For those who don’t need or meet the criteria for this grant, regional cities I think, offer viable alternatives to purchase and if not moving in, then rent out. Who knows, you might want to move in on retirement, having recouped all of your initial outlay in the meantime and some.

 

I guess the point is for all the data available, don’t delay due to ‘analysis paralysis’ for here we are nudging February already. A legitimate point for pause would be economic uncertainty.

 

So while we can’t help you with your decision up to the point of saying yes, when you are ready we can and do look forward to making it a reality. And once you have said yes, I like to share in the excitement that a property purchase can bring.

 

I will finish with a quote from the NSW labor senator Mark Arbib who sums up with “Over the past 20 years, we’ve seen prices rising to a level where people don’t have the income to buy but the phenomenon now of low interest rates and the first home buyer grant has helped many, as well as prices coming off. This presents a real opportunity for many.’

 

The Property Team at LAC Lawyers.

 

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