THE New Year is set to bring renewed activity among Far Northern first home buyers.
REIQ regional boss Rick Szelpuk predicted the resurgence of first home buyers, after a surge of activity earlier in 2009 as people rushed to take advantage of generous Federal Government grants.
The market has tapered off as the year enters its final month and as the grants were reduced.
Until September 30, first home buyers could get grants of $14,000 while first home builders could get $21,000, part of an effort to stimulate the construction sector.
From December 31, this will be reduced to $7000 and $10,000 respectively.
Despite the grant cuts, Mr Szelpuk said there were signs first home buyers were about to become a factor in the market again after a quiet period since September.
"The grants brought forward a lot of sales, in that people might have bought early in 2010 but ended up buying this year,’’ he said.
"Since the $14,000 grant stopped things have been a bit up and down but things quieten up before Christmas anyway. The period January, February and March will be a better gauge of the market.
"I’d certainly hope that it will be quite good, looking at it on the basis that I think there is a bit more optimism creeping into the economy.’’
Another brake on buying has been tightened lending practices from the major banks in the wake of the American sub-prime crisis and resultant global financial crisis.
"Banks are still very cautious, we are certainly not hearing anything different,’’ Mr Szelpuk said.
"We are now allowing 21 days rather than 14 for finance to be approved.
"But as confidence returns to the economy, banks may loosen up a little.’’
Chief operating officer for the Loan Market Group Dean Rushton said 30 per cent of first home buyers who enquired about loans would be rejected as their savings were too small.
"The reality is today, banks are going to be more selective and because of their competitive position, if they have a number of applicants they’re not going to look outside the current loan to value ratios or savings because there’s enough business around,’’ he said.
"It’s the first home buyers who’ll be feeling it.’’
