More Help for First Home buyers

Announced with the last state budget, the Stamp Duty rebate, is being progressively rolled out, initially as a 20 percent reduction, with a further 10 percent to be knocked off in January 2013 and 2014 respectively and then a final 10 percent reduction in September 2014, bringing the total rebate to 50 percent of the stamp duty, usually paid by first home buyers. It applies to homes that cost or are built for $600,000 or less.

The Stamp Duty rebate, which must be applied for after settlement, complements the existing first home owner grants. Under this scheme, buyers are eligible for a First Home Buyers grant of $7,000 when purchasing a home up to the value of $750,000. If the home is newly built and its price does not exceed $600,000, there is an additional bonus of $13,000.

Buyers in a regional area, in addition to the previous two figures, will get another bonus of $6,500, if the price or construction does not exceed $600,000.

State government figures show that more than 28,000 people claimed the first home owner’s grant for an established or new home in the last financial year alone.

Earlier this month, a spokeswoman for Treasurer Kim Wells, told The Sunday Age, that the Stamp Duty cuts had assisted more Victorians to buy their first home, with government figures showing” 1,428 buyers had collectively saved more than $3.96 million in stamp duty under the program so far.”

However, Greville Pabst, chief executive of the WBP Property Group, a prominent Valuers group, says the Stamp Duty concessions so far appear to have had ”little impact” on the number of first home owners entering the market.

Melbourne as an easyhomerenovating capital

The recent State government studies researching new transport upgrades highlight the opportunity in Melbourne. Sir Rod Eddington, Infrastucture Australia, is suggesting an underground east-west link tollway road tunnel. This would link the Western ring road to the Eastern freeway, its long over due. The Westgate bridge which has become completely overloaded and clogged, it needs an alternative route.
Melbourne, is forecast to need atleast 600,000 new homes over the next twenty years, so lets consider the transport needs, before the roads become gridlocked. A new outer Western ring, to swing from Beveridge to Melton down to Werribee is mooted. This would support the growth of Lockerbie, Tarneit, Wyndham vale, Melton, Werribee South, Point Cook and West Wyndham vale.
The prospect of fifteen new trains stations, including at Donnybrook, Beveridge, Wyndham Vale, Tarneit, Truganina, Toolern, Rockbank, Clyde and Sunbury North.
Not all these projects will proceed smoothly, but atleast some great plans are being laid, for the expected massive growth of Melbourne to the north at Donnybrook, west at Melton and south-west at Wyndham vale. The projects to proceed will need considerable Federal funding.

Move house or Renovate the current Home?

This is a torrid question. Given the very high fixed charges of Agents fees, advertising, moving costs, renovation, repair costs at the new location and Bank fees. These costs will add up to atleast ten percent of the value of your home, more likely 12%. So on a $700,000 home, the moving cost adds close to $84,000, this gives one pause for consideration, this would buy a lot of renovation. I am inclined to prefer the renovation option in a flat market. If you want to do the renovation, yourself or have a modest outlay, then stay where you are and renovate. The array of cheap products from big, bulky goods, Bunnings, Lowes, Masters, Home Depot warehouses and quality tradesmen favour renovation.
I offer the idea, it also depends on your age and plans to stay in an area or ‘upgrade ” to a better location. If you are expecting considerable capital growth and have the years to achieve this growth, then you may prefer to relocate. If you have a desire for a much improved suburb and are willing to make a large outlay, then consider moving. The advent of reverse mortgages, suggests one can add substantial value into your home, even as a savings plan. Consider your personal circumstances.

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Melbourne Suburbs Home equity levels

I am reading about the relative equity levels of some Melbourne suburbs. It is interesting to note, that some have much higher levels of home owner equity than others. This could be indicative of a much higher ability to meet home mortgage repayments during any financial stress period. The highest equity levels are as follows, homes with more than a fifty percent equity, Boroondarra 80.4% Eastern middle Melbourne suburbs, 79.9%, Eastern outer Melbourne 77.7%. While, the suburbs with low levels of equity include, Inner Melbourne, 65.3%, Melton/Wyndham, 59.2% and South Eastern outer, 65.8%. Simplistically, I say, these ones with a lower equity level, are areas where home owners may find it harder to hold their homes, in any financial crisis time. So the Eastern suburbs, are the safer places for home renovating to hold a home for the long term! Thats where the big money is made by compounding growth over the long term.

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Lower interest rates for Fixed loans

In recent days, the home loan rates for fixed term three and five year loans have been reduced. The ING Bank, St George Bank, Westpac and Credit Union Australia have all cut their interest rates. This reflects the latest monthly fall of 100 points in the professional Futures Interest rates markets, as the world adjusts to a slower growth outlook. The St George Bank three year rate is now 6.39%, CUA 6.34%, ING 6.29%, Suncorp 6.29%, Citibank 6.29% Westpac 6.64%. Banks are making many less home loans, given the volume of home sales has fallen by between close to 60% for 2011, compared to 2010 and 2009.
The direct application websites, offer attractive rates direct over the Internet at U Bank, One Direct, Homepath, Westpac and the Commonwealth Bank, also have direct loan application websites. Direct application eliminates the margin of the Mortgage Broker, of close to 30 points. Recent cut in November of the cash rate from 4.75% to 4.5% and Futures markets indicate likely future falls in interest rates of 100 points over the coming 2012 year. The prospect of slower economy growth in Europe suggest interest rates will remain weak to falling, for lower levels in 2012.
Latest news from Europe indicates a slower economy in Italy, Greece and Spain.

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