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Affordability Initiatives Help First Home Buyers

Wednesday, September 24, 2008

This year's high interest rate environment put the brakes on the market, but with signs that interest rates are trending down, buyer activity is likely to gradually strengthen in coming months, according to the Real Estate Institute of Queensland (REIQ).
And while housing affordability continues to be at historic lows, a number of housing affordability initiatives introduced this year may help first home buyers into the market, including lower interest rates, as well as the new first home buyer stamp duty exemption threshold of $500,000 may encourage more first time buyers into the market. The new stamp duty threshold - coupled with the axing of mortgage duty in July this year - provides much-needed savings of up to $9,500 for anyone buying their first home.
REIQ figures show that 35 per cent of all house sales in Queensland in the June quarter this year were for less than $350,000 and 75 per cent of all sales were for less than $500,000.
And while the $400,000 to $500,000 price bracket is likely to be out of reach for most first home buyers, there are still a number of options available for under $400,000 for buyers seeking to enter the market.
Australian Bureau of Statistics figures (ABS) show that the number of first home buyers as a percentage of total owner occupied dwelling commitments increased to 18.6 per cent in July this year, up from 17.3 per cent two months before. And the latest ABS housing finance figures found that in July this year, the average home loan size for Queensland first home buyers was $255,300.
This figure shows is that many first home buyers are taking into account the current economic environment, including high interest rates, when buying their first home and not over-extending themselves financially.
**excerpt from REIQ media release 12th September 2008

- Julie Collins

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