Property prices to fall in July if first home grant ends | Herald Sun

PROPERTY prices are heading for a fall if the higher first home buyer grants are not extended, Australia's largest mortgage broker warned.

Fears are growing that the first home buyer frenzy that has supported the prices of more affordable properties is about to end. "Disturbingly, the rebound in Australia's mortgage market could quickly turn to a hangover if Government grants are withdrawn at the end of June," Australian Finance Group sales and operations manager Mark Hewitt said."Once the boost to the first home buyer grants end in June, we face the possibility of a bleak mortgage winter."

Mr Hewitt said 29 per cent of home loans applied for in March were taken out by first home buyers. But he said this apparent boom was masking a growing number of loans that were not approved.A sharp drop in the number of lenders in the market meant it was harder to get a home loan.

Buyers advocate David Morrell, of Morrell and Koren, said recent high auction clearance rates were giving a false impression of the state of the property market. He said many owners were still living in the past, believing they could get 2007 prices. Many top-end houses were passing in well below reserves."Deals will be done . . . eventually they always must be," Mr Morrell said. "But don't expect to see a buyers stampede for cheque books."

Property prices to fall in July if first home grant ends | Herald Sun

First Home Loan Specialists Comment

This is an interesting comment. The Government is staying very quiet on whether they are extending the boost and they will have to find savings in this budget. The message they are currently sening is that the boost will not be extended.

It maybe that the middle ground is taken by the Government and the boost will only apply to building new homes.

Greg Brierley
Principal

T: 1300 884 809
F 02 62412545
E: Greg@firsthomeloanspecialist.com.au
W: www.firsthomeloanspecialist.com.au

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