Real Estate Daily

Say goodbye to “No deposit home loans”, and say hello to requiring a deposit of between 10 and 20 per cent of the purchase price of a home. From December 1 the Commonwealth Bank will only lend up to 80 per cent of the value of a home if you’re not prepared to pay mortgage insurance, whilst the ANZ will loan you up to 90 per cent of the purchase price.

This could have a negative impact on the anticipated flood of first home buyers that’s expected to hit the market. With Uncle Kevin giving them up to $14,000, that will leave first home buyers still needing to save an extra $31,000 before they can lay down a deposit on an average $450,000 home, and that could be beyond a lot of them. The banks are also going to be a lot tougher when it comes to assessing mortgage applications. This is already happening, with agents telling me that they’re seeing a sharp rise in the number of contracts falling over because people aren’t able to get finance.

With that in mind, I expect to see a rise in demand for low-cost units. For example, you can pick up a decent 2 bedroom unit in Coorparoo (5km from Brisbane CBD) for $300,000, which could be tempting for those who value inner-city living, but can’t afford a house.

Now, house prices could fall, but until they do then units could be the best option for first home buyers.

If you enjoyed this post, make sure you subscribe to my RSS feed!