Andrew Bell’s Market Update: Why Should First Home Buyers Be Acting Now?
Issue 19 | September 15th, 2016 | Why Should First Home Buyers Be Acting Now?
There has been lots of feedback on Mayor Tom Tate’s Paradise Waters home which featured in the last market wrap. If you are interested, it sold last week prior to Sunday’s on-site auction. This was a result of strong offers that were presented to secure the property prior to the auction. One clearly was too good to refuse, which shows the power of auctions once again.
Coast’s prestige property market booms – click here to read the Gold Coast Bulletin.
The Benefits For First Home Buyers – Don’t Wait!
A recent report has suggested that home ownership has dropped from around 66% to as low as 50% over the past recent years. I do not agree with that, however, we certainly know it is in decline.
We know that rising real estate prices make it challenging for first home buyers, however, let’s remember that real estate prices have been rising for hundreds of years since the first settlement so we should not be so quick to simply use that as a reason not to buy. We all have that family member or friend, which we know are stuck in the rental trap. We need to encourage them to get serious about home ownership so they are not stuck in that trap forever.
Right now there are some real benefits that should be capitalised on in Queensland. First home buyers have an added incentive with the Government as they recently increased the first home buyers grant to $20,000 from the 1st of July 1st 2016. It is only in place until the 30th June 2017. It is available for people who buy or build new homes valued less than $750,000. We also have record low interest rates. This is a generational opportunity that no first home buyer should miss out on. We also have a surge in building construction meaning that first home buyers have a greater choice and potentially greater negotiating ability. Let’s remember that all of these factors won’t stay in place forever and need to be capitalised on now.
The Current First Home Buyer Pattern
There is also another trend that has emerged for first home buyers. Many are buying an investment property before buying a home to live in. Mortgage Choice investor survey last year revealed 36.6% of investors were first home buyers and that was up from 21.1% the year before. This is largely due to so many first home buyers want to live close to work and where all the action is, yet they can’t afford properties in those locations so they buy, out in the more affordable areas, and rent the property out but at least they have got a foot hold in the real estate market They then rent a property in central areas for their own place of residency. This new trend is described as “rent-vesting” and certainly suits the lifestyle of many millennial, allowing them to flexibility in where they live, ability to maintain their lifestyle yet grow their wealth by being in the real estate market.
Early Pain For Long Term Gain
Unfortunately, getting ahead in life usually means a little bit of sacrificing. Much of the younger generation are really big on travel, clothing, night life, cars and so on. A recent survey again by Mortgage Choice found that 69.4% of investors admitted to making sacrifices to buy property. They cut back on their day-to-day spending to achieve their property ambitions. I know many young couples who are working more than two jobs to stack away the cash to buy their first property. They are sacrificing holidays and lots of other lifestyle choices for a number of years in order to get into their first property. A little early pain for a long term gain.
For those desiring to get into their first home and for all of those who know people who perhaps should be aspiring to be in their first homes it is really important to take stock right now. Put a plan in place because you don’t want to be a tenant for the rest of your life and now is the time to make your move whilst there are these benefits available.
Cause For Celebration
A quick note of thank you to all of those who attended our Ray White Surfers Paradise Muscular Dystrophy Ball it was a fabulous night which so many described as the best ball ever. Don’t like the tag but glad they feel that way. We raised approximately $150,000 and 50% of that will dispersed very quickly to the Muscular Dystrophy Association to buy wheelchairs, beds, breathing apparatus etc and the other 50% into research grants to find a cure for this disease.
Check out some of the photos from the night on Facebook here.
Timely also to let all of our business fraternity know about our upcoming “Ray White Surfers Paradise Business Lunch powered by Supercars” it is a key event on the Gold Coast 600 calendar of events and it is a lunch on Thursday 20th October 2016 at the Gold Coast Convention Centre. It is a great way to entertain clients or award staff and it is always very entertaining. A great networking opportunity. We are limited in seating so if you would like more information contact Selena Carson our Event Coordinator on 0410 650 185.
That is it for this week, stay safe and I will be back in a fortnight’s times.
Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group