As of the 1st of July 2013, reported articles have made agencies and the public aware of a significant cut for first home buyers, but not for the better.
Mid this year the Victorian Government will again be changing the first home buyers grant and stamp duty rate, entirely removing the grant for an existing home purchase and reducing the stamp duty rate by 40%. Although it is positive that people looking to enter the property market can benefit from the 40%, overall it does not provide adequate assistance for an existing home purchase. These changes will see the $7000 grant removed for established homes and an increase for new homes to $10,000.
Enzo Raimondo, CEO of the Real Estate Institute of Victoria, recognised this as a big blow to the first home buyer market. He noted that statistically approximately 70% of first home buyers in the March quarter purchased an established property, despite the stamp duty saving of purchasing a new home. Managing Director of Integrity Real Estate Bill Verhagen said, “A certain percentage of first home buyers prefer to buy an established home and move in, rather than going through the process of building. Most of the time they’re able to find a decent home suitable for their needs within their set budget.”
In theory, cutting the stamp duty rate for first home buyers looking for a new home is a viable strategy for government assistance which in turn helps stimulate the building industry and the property market, but it’s questionable and likely to severely reduce the enquiry on established properties. It is expected with this knowledge that the second quarter of 2013 will see many first home buyers look to move forward in purchasing their first home before July 1st. A stamp duty reduction should offset the loss of grant provisions, and in a perfect world new home owners shouldn’t be subject to stamp duty fees whatsoever. But with these new laws the lower market range, specifically sub $400,000 homes, may see a significant drop in enquiry rate for first home buyers.
First home buyers looking to take advantage of the current grant available should seek advice from their financial advisers, lending institutions and local agents to secure the best purchase for their budget and take advantage of any financial government assistance before it’s too late. New home owners looking to purchase in the Yarra Valley and surrounds will be surprised to note that you can still buy existing homes on good size allotments for under $400,000. Integrity Real Estate has prepared a buyers guide to help those entering the market, we wish you all the best with your property portfolio for 2013.
Buyers Guide: http://realestateyarravalley.com/buyers-guide/
Regards,
Team at Integrity Real Estate.
