News and Announcements

Incentives for first home buyers

05 December 2011

Author: REIV

With house prices lower than they were at the most recent peak a year ago, now is a sensible time for those considering buying their first home to take the step into home ownership.

To assist first home buyers, the Victorian Government offers a range of grants and incentives.

Established over a decade ago, the First Home Owners Grant provides eligible buyers with $7,000. While the grant is not means-tested,  the home you want to buy must not cost more than $750,000; an upper limit that covers almost all purchases a first home buyer is considering.

The home must, of course, be your first and you must live in it. Other eligibility criteria are available from the State Revenue Office.

The state government has also introduced a discount for first home buyers on Victoria’s very high stamp duty rates.

For the next 12 months that discount is 20 per cent and it applies to homes valued up to $600,000. On a purchase of $600,000, that equates to a saving of $6,214.

Those interested in a new home will find they can access the First Home or Regional Bonus along with stamp duty savings when buying off the plan.

In the same way that it’s prudent to get pre-approval for a home loan, it’s sensible to ensure you fully understand the eligibility criteria before you start house hunting. TheREIV website has an overview of the financial assistance for first home buyers, with links to the relevant sections of the Victorian Government’s State Revenue Office.

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Auctions for units and apartments

04 November 2011

Author: REIV

From the broad perspective of changes in median prices, there are few differences between the market for units and apartments and houses. The increases and falls in median prices have generally matched each other over the past five years. This is demonstrated in a graph in the median prices section of the REIV website.

Differences are, however, apparent when comparing at auction the performance of each class of dwelling.

Unit and apartments count for one in three of all auctions and the clearance rate has been higher than that for houses so far this year.

This repeats a trend from last year.

So far this year the overall clearance rate is 57 per cent from just under 23,000 auctions. Last year the overall clearance rate was 72 per cent.

There have been around 7,500 unit and apartment auctions, with 59 per cent selling. This compares to a 56.6 per cent clearance rate for just over 15,000 auctions of houses.

The level of overall demand for units and apartments matches the result in the Melbourne CBD market, where there have been 472 auctions with 59 per cent selling. While both neighbouring Docklands and Southbank are dominated by units and apartments, there have only been 75 auctions held this year, with private sales being the preferred sales method.

While volumes were lower in 2010, the differential in the clearance rate was similar, with 72 per cent of units and apartments selling compared to 70 per cent of houses.

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Loans as a market barometer

10 October 2011

Author: REIV

The monthly publication of housing finance data from the Australian Bureau of Statistics is very useful information for those with an interest in the market.

It catalogues the number of loans issued, their value and the average amounts. In doing so it provides a useful proxy for buyer activity in Victoria.

In the month of July the ABS reported that there were 13,211 loans financed, compared to 14,147 in June and 13,245 in July 2010. This is around six per cent lower than average over the past five years but higher than the low of 13,055 in 2008. The lower volume of sales is reflected in the number of loans issued.

This is still much higher than the last time clearance rates were persistently in the 50s in 2004, when the number of loans issued was between 10,000 and 12,000 per month.

First home buyers comprised a mere 15.8 per cent of loans issued in July compared to 17.6 July last year and the high of 30.2 per cent in May 2009, when first home buyers responded to generous financial incentives. In raw numbers that translated to 2083 loans in July compared to 2337 July last year and a substantial 4,675 in May 2009.

The average loan amounts provide an interesting reflection on prices. In July the average loan for a first home buyer was $281,000, which is very similar to a year ago but well above the $255,600 only two years ago. This is because of a large increase in house prices between 2009 and 2010, an outcome that is not apparent this year.

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