First home owner’s grant is Propping up Australia’s Housing Market

Only just though. The predictable calls are now to extend the higher rate of the first home owner’s grant past its June 30 cutoff date. After years of a housing market supported by negative gearing by investors now, suddenly, debt is out of fashion and grants are back in favour.

Value of new loans to first home buyers have been rising for each of the last three months of 2008, while the investor market is in freefall, with loan values dropping 6.1% in the same period. New buyers are finding that the combination of Federal grant, local State incentives, which often amount to another $2000 or $3000 and falling mortgage interest rates are starting to make owning more affordable. More negotiable owners are probably helping the savvy too – after all the young buyer who has been to ever auction in the area for the last 12 months usually knows a lot more about the market than some of the real estate professionals!

Australian Luxury Beach Property: Bargains Galore

The luxury property market: particularly that of luxury beach houses in regional centres is dead. Former hotspot Byron Bay, NSW, has plenty of choice on the market, but has not seen a seven figure sale for over a year. Investors are trying to downsize the debt, but are having to downsize the asking prices big time. Drops of 20% from initial asking prices are not unusual.

One of the worst hit locations is Palm Beach, on Sydney’s northern beaches, and long a favourite locale for the local celebs and wannabes. Prices have fallen by as much as 25% in the last year with one ocean front property recently selling for $2million under its asking price of $14million. Another buyer got a Palm Beach property for a cool $1million less than its asking price of $9million. Gold Coast and Busselton, a couple of hours south of Perth, have seen similar price falls of around 20% – though you can still get a nice place in Busselton for around the $2million mark.