Before and after Christmas can be a popular time for people to consider buying property. The holiday season gives people more time to look around and prepare for the new year.
Many such people will be first home buyers looking to enter a market now much more favourable to them as prices come down, interest rates fall, stock levels rise and government help expands.
The Federal Government now provides $14,000 to first home buyers who buy a dwelling that has previously been lived in. This offer ends on 30 June next year.
This financial help expands to $21,000 if a first home buyer is building from scratch or purchases a newly built property which hasn't previously been sold or lived in. Again, time limits apply for eligibility and construction so it's important to check the rules first.
This Federal help is irrespective of means testing and not dependent on the purchase price of the dwelling.
There is also the State Government's First Home Buyers Assistance Scheme. This provides up to $2,000 assistance to eligible applicants depending on the level of fees incidental to the purchase. The scheme is open to some low income earners buying their first home through a licensed real estate agent, provided it is under $400,000.
Your local REIWA member agent can inform you if either or both of these schemes are available to you, so you can devise the best plan to budget for your first home.
Once you have a budget be realistic. Start with an affordable home, don't overcapitalise. You can upgrade to a better, larger home or different location over time as you build up equity and ultimately end up with your dream home.
It can be tempting to use this government assistance to stretch the first home loan as much as possible, but a much wiser approach is to use this money to boost the equity.
Don't spend too much too fast or you might weigh yourself down with an excessive mortgage at the start, and then find that you're not able to greatly increase the equity in the short term.
The regular upgrade approach works best because the equity in your home can rise quickly if you achieve consistent growth rates in property values and you can make extra home loan repayments.
This is best achieved in the established housing market where homes are usually cheaper than the cost of building an equivalent one new.
Either way, in the current global financial conditions it's import to keep your debts down and pay off as much of your mortgage as you reasonably can, as quickly as you can.
For web info:
Federal Government First Homeowner Grant: www.firsthome.gov.au
State Government Homebuyers Assistance Fund: www.reba.wa.gov.au
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