“First home buyers who qualify for the First Home Owner Grant (the grant) may also be eligible for an additional payment known as the First Home Bonus. To be eligible to receive the bonus, the value of the property must not exceed $500,000. ” (SRO)

So from the 1st July 2009 through to the 30 June 2010, the Victorian State Government will provide an additional $2,000 for FHB of established property and $11,000 for FHB of new homes. This is on top of the Federal Government First Home Buyers Grants.

In addition to the above, the state Government is also encouraging First Home Buyers to purchase in regional Victoria. There is an additional $4,500 on offer for those that buy in Regoinal Victoria. Here is a link of all the municipalities that comply with the additional Regional Boost: http://www.sro.vic.gov.au/sro/srowebsite.nsf/taxes_firsthome_bonus_regional.htm 

This is a very proactive step by the Victorian State Government and really encourages more people to buy, it helps spread the interest to new growth corridors and encourage developers to continue to bring new product to the market. All in all a great result for the residents of Victoria.

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The federal budget was announced tonight with an announcement that First Home buyers will have another 6 months of boosted grants. 3 months at the full rate and 3 months at a halved rate. The boosted grant will end 31 December 2009.

I really don’t understand where the Rudd Government is going with this… the extension should have been alot longer and been more focused on new property. Treasurer Wayne Swan said that the initial boost was a success but wasn’t prepared to continue the boost to help support the Australian economy for more than 3 months at the full rate.

I understand the boosted grant can’t continue forever, however the major impact to the overall economy is far greater than the cost to the government in the short term.

So far, according to Wayne Swan, the first home owners boost had already helped 59,000 people achieve the great Australian dream. One would now assume that some panic would be removed from the first home buyers market while first home buyers have a little more time up their sleeve to find the right property for them.

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Some First Home Buyers in Victoria are jumping for joy as new plans are announced for the states First Home Buyers Grant. The grant has been extended by 12 months with some modifications. It is now  focused heavily on new home buyers. The state bonus that was $5,000 has now been increased to $11,000 from the 1st July 2009. Further incentives have also been put in place to encourage home ownership outside of Melbourne in regional Victoria. Where First home buyers were once getting $3,000 for a purchase in regional Victoria, they will now be receiving $4,500 from 1 July 2009. The First Home Buyer state bonus will be avaiable for those purchasing under $600,000.

“Premier John Brumby said today the new package was aimed at helping Victorian families into their own homes sooner by offering $22,500 for first home buyers purchasing a new home in regional Victoria, $18,000 for a new home in metro Melbourne and $9000 for an existing home as of 1 July this year.”

This is a big commitment by the State Government, however the positive effects on this should be well worth it. Further to this, this statement also reduces the pressure of the Federal Government to continue their First Home Buyer Bonus. The focus on the Federal Budget tomorrow night will give us an inidication of where the Rudd Government sees the place of the Australian property and construction industry in the recovery from the current economic turmoil that Australia and the rest of the world are in.

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It looks like the boosted First Home Owners Government Grant has done more for the Australian economy than anyone expected with a huge 42% increase in the number of First Home Buyers in NSW according to BIS Shrapnel. Although recent reports indicate that property prices have fallen, futher research tells us that a number of suburbs in Sydney have actually increased in value over the last 12 months. The more affordable property in Sydney property market is definetly on the way up with a rush from FHB. The upper end of town is feeling the effects of the economic down turn the worst with suburbs like Double Bay and Mosman falling more than 8% over the last 12 months and expected to fall further. Once again these drops are attributed to the higher priced properties in the area which may have been selling at $3.5m 12 months ago but in some instances the same proeprties are now worth a few hundred thousand dollars less. Properties in these regions that are sub $1,000,000 are still selling very well. After walking into 2 properties in Rose Bay over the weekend, both agents indicated a stong demand for properties at this price range with both properties having over 30 groups through on the weekend open house.

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The boost to the first home owners grant will not be extended beyond June 30, Prime Minister Kevin Rudd says.

“The first home owner’s boost, as you know, we have indicated that will conclude within a very fixed and finite time frame,” he told reporters in Perth.

“It’s had strong useful results so far, but I have got to say all good things must come to an end.”

This is a poorly timed comment by the prime minister, with 2 more months to detemrine the effectivenes of the boosted FHBG. Many Real estate agents and mortgage brokers are already commenting on the poorly timed comment. With so many back downs by the Prime Minister Rudd in recent times, the likely hood that he may reverse this decision is relatively high. It seems that putting a stop to the only inititave that was helping the Australian economy is a disasterous mistake.

For those first home buyers – don’t feel pressured into buying a property before the grant ends…. if you are ready, certainly take the leap… as the results of the grant not extending will most likely be another large increase in rental payments over the following 12 months.

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Lenders, Banks and Non Banks, are struggling to keep pace with an unexpected increase in applications from first-home buyers due to the first home buyers grant deadline at the end of June this year. Some banks are taking as long as a month to approve loans. This is resulting in some buyers missing their settlement dates.

The banks new lending policies and the poorly organised applications by new borrowers is hampering the banks efforts to approve and allocate loans ontime.

Banks are now hiring more staff to cope with the demand… a reversal from 6 months ago when banks were letting go staff in their home loan lending divisions.

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Government figures have now confirmed what many of us have being saying for months… and that is, it is cheaper to buy than rent in some cases. It is the perfect time for those looking to purchase a home. Prices have stabled, rents are increasing and interest rates have dropped significantly over the last 8 months. This has created, along with the boosted FHOG, plenty of activity in the affordable hosuing market with anything under $600,000 being snapped up by interested parties. There are thousands more home buyers on the prowl at the moment and this is great for the stability of the property market in Australia.

While interest rates are low, and some expect it to go lower during 2009, now is the time to be house hunting with a pre approved mortgage so when you find a home that suites, you can bid confidently at auction or negotiate a private sale.

Good luck with house hunting!

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