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New homes become the first buys for 2010

New homes become the first buys for 2010

Is it a good time to buy a home with interest rates on the rise? Jack Han investigates.

December 1, 2009

Buyer activity is expected to diminish over the summer season as Christmas and the New Years passes. However, experts believe that this is the perfect time for keen home buyers to snap up bargains in the housing market, which puts home loans at the top of many shopping lists.

According to RP Data’s head of property research Tim Lawless, the seasonal slump of the property market is most pronounced from the second week of December to the third or fourth week of January, where advertising and buyer activity comes to a standstill.

“For those looking to buy, the festive season is a time when there is reduced competition in the market, so potentially this may be a good time to seek out a property and make an offer,” he says.

“Prices are likely to continue rising over the first quarter of 2010, albeit at more modest levels than recorded over 2009.”

Therefore, the beginning of 2010 is the best time to purchase a home, which means thousands of Australians are rushing to lock in the lowest rate home loans.

According to Lawless, premium suburbs are likely to be targeted by buyers, due to suffering the most decline in 2008-09, which means that shoppers have a good chance of negotiating bargains. However, improved market conditions also mean that there is a lot of room for growth in the lower-end of the property market.

If the first bargain you are shopping for in 2010 is a new home, then here are a few simple guidelines to help you find the best home loan.

  • Start by comparing home loans by rate, especially now that the cash rate is on the rise. Experts predict that rates will rise by another 1 percent in 2010, so it is crucial to find the lowest rates early.
  • Keep an open mind when you narrow down your hunt by lenders, because non-banks are using the New Year to attract thousands of home buyers.
  • The more research you do yourself, the less time you will waste negotiating features and fees. Consider your new budget for 2010, and prepare a list of must have features to pinpoint your perfect home loan.

With the cash rate expected to rise to almost 5 percent by Christmas 2010, the longer you wait, the more you will be paying. Get into the New Years spirit, and make obtaining a brand new home part of your 2010 resolutions.

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