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No incentives, no worries - 2010 is ripe for home buyers
Jack Han finds the upside to downward pressure on the home loan market.
March 22, 2010
Despite rising interest rates and the drawback of government incentives, 2010 may be the perfect time to buy a home, according to some mortgage experts. This has injected some optimism in the housing sector, which had entered the year with less than ideal outlooks.
The housing market is believed to have settled to ‘normal’ conditions, after the peak of first home buyer demand inflated prices last year. In 2010, buyers are expected to take their time to consider their housing and home loan options.
Australia is now ranked fourth in the world for property price growth, gaining the attention of both local and international home investors, according to Global Property Guide. On top of that, Australia’s housing affordability is returning to long term averages – another sign that home loan borrowers in this era will be welcomed into stable markets.
Our mortgage default rates are still some of the lowest in the world according to the Reserve Bank. In December, Australians defaulting on home loan repayments by more than 90 days was almost a tenth of that of America and a quarter of the UK.
Home buyers are now expected to save tens of thousands of dollars due to the declining demand, following figures released by the Australian Bureau of Statistics (ABS) which found that demand for home loans dropped by 5.5 percent in December compared to November.
First home buyers have relinquished much of their share of housing commitments. From their peak, where they held 29.5 percent of all home loans in May 2009, it has decreased to just 21 percent in December 2009 according to ABS.
The $7,000 First Home Owners Grant remains, and other incentives such as the NSW Supplement for new homes are in place to encourage further first home buyer activity.
While home buyers may be stepping into calmer waters, the most important lesson to learn is that it still pays to be cautious when entering the home loan market. Before you take the dive, compare home loans for the best rates and features, and discover the new competitive offers that will help you save thousands per year.
If you believe that 2010 is your year to get a home, don’t tempt luck by scrambling for the first deal you see. Enjoy the calm of the market, and keep your wits about you for the surprises that are sure to come.
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This article is over two years old, last updated on March 22, 2010. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.
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