First home buyer competition to heat up
A rare combination of budgetary and policy shifts hitting Victoria in coming weeks is expected to produce a surge in first home buying across the state.
The momentum will come off the back of an expected interest rate cut in early June, the newly elected federal government’s proposed first home buyer deposit scheme, and a relaxing of lending criteria that allows a greater number of buyers to borrow more funds for purchase.
It all adds up to ripe conditions for first-home buyers, many of whom have been in a holding pattern in recent months.
“The timing is perfect for first time buyers,” says Resimax Chief Operating Officer Darren Mehl.
“The expected interest rate cuts (to record lows) coupled with APRA’s loosening of credit criteria will restore some confidence back in to the market. The current market is reportedly down circa 20% which means housing stock is more affordable than last year. This creates a great environment for first time buyers to enter in the market and qualify for the first home buyers grant as well as having funds accessible to them.”
Currently, demand is relatively low in Victoria, and prices are lower to reflect that. The changes to interest rates, lending criteria and the federal government's deposit guarantee should incentivise greater demand and start to increase prices. This translates into more competition for those entering the market.
Suburbs in the state’s western and northern corridors remain the best options for new buyers. PRD Nationwide have pegged Mitchell Shire in Melbourne’s north (featuring the popular hub of Wallan) along with Ballarat, Warrnambool and Wodonga as Victoria’s hottest regional locations for buyers looking to snap up a great deal.