Is now the right time to buy your first home?

May 25, 2011

With slightly lower prices, reasonable interest rates and plenty of properties to choose from, is 2011 shaping up as a great year for first homebuyers?

Rhiannon McClelland from the Real Estate Institute of Australia answers the burning questions about the current state of the property market.

Is now a good time for first homebuyers?

Yes, house prices are softening slightly which will make buying an affordable home more achievable for first homebuyers.

Even though an interest rate rise appears imminent, should first homebuyers take advantage of the flat housing market?

Yes. First home buyers always have the option to lock in a fixed or partially fixed home loan rate to escape interest rate rises. And even though interest rates are a major contributor to the level of affordability, if first homebuyers are worried about rates rises, a fixed rate mortgage could be their best option.

What other factors make it a good time for first homebuyers?

The housing market is slowing slightly due to the market’s natural cyclical changes – purchasing now could mean a reduced price in comparison to what we might see in 12 months.

Overall, what does the federal budget mean for the mortgage market?

The federal budget does not present much change for mortgage holders – there were no measures to assist the long-term improvement of housing affordability, or to provide relief for mortgage holders currently struggling to meet mortgage repayments. There was nothing specific for mortgagees, but overall it was a budget that will promote economic growth.

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