Skip to main content

How to buy a House


For all of 2019 and part of 2018 the Australia property market has been in decline (in Southern States) or simply sluggish.

Many put it down to the Federal election and even the chance of a change of government.  Especially with the Labour Party proposing major changes to Negative Gearing and Capital Gain Tax, with unknown results.

However the return of Scott Morrison as Prime Minister, signals a removal of distractions and the possibility of a rosy future for the Australia property market.

No More Uncertainty in the Property Market

5 Reasons to get excited about the Brisbane property marketThe biggest gain for the property market from the Coalition parties election is the removal of the uncertainty that was overhanging the market. The unpredictable future of the Australian property market made it very difficult for investors or home buyers to purchase with any real confidence.

However, with the Liberal government back in power, there are no expected changes to negative gearing and Capital Gains Tax policies. So effectively there is no change here, which reduces people fear of what might happen.

Incentive Packages For First Home Buyers

The coalition government is expected to deliver on its promise of assisting first home buyers. This assistance is in terms of the $500 million pledged by the coalition government towards the first home buyer’s deposit scheme.

5-Reasons-to-get-excited-about-the-Brisbane-property-marketIf delivered, this would mean that for first home buyers, the government will top up the difference between a 5% deposit and the normal 20% required for eligibility to purchase a home. Therefore, first home buyers will be able to secure a loan to purchase their home without having to take out expensive lender’s mortgage insurance.

For the property market, these incentives are expected to revive the current low and stagnant presence of home buyers. However this initiative is limited to only 10,000 applicants so may only have a small positive impact on the market.

Tax Cuts for Australians With Income Of Up To $126,000

One of the most articulated election policy of the Coalition parties was the legislation to cut taxes that would benefit low and middle-income households. The promised tax reforms will see Australians earning up to $80,000 receive tax relief of about $1,080 every year.

These tax cuts mean that many more households will have more money to spare for their day to day living or savings. The presence of extra money to spare means more household may be eligible and willing to make investments in buying homes or upgrading their properties.

Expected Interest Rate Reduction from the Reserve Bank

The Reserve Bank Governor, Phillip Lowe has been indication that the Reserve Bank will be looking at an interest rate cut, as early as next week.

Many Bank have been expecting a lower interest rate and have started to reduce fixed rate loans in advance of the announcement.  Some economists are suggesting that there may even be 2 cuts to official interest rates this year.

This will certainly make borrowing and repaying a loan for a house a lot easier.

Easier Lending Criteria Proposed

The Australian Prudential Regulation Authority (APRA) has flagged lowering the minimum interest rate serviceability buffer from 7 per cent to a level determined by banks and other lenders.

For the past four-and-a-half years, APRA has required banks to test prospective borrowers against the higher of either an interest rate of 7 per cent, or a 2 per cent “buffer” over the loan’s actual interest rate, to ensure they could meet repayments if rates rise.

The regulator also asked banks to ensure borrowers were “comfortably” above these tHicks Real Estatesholds, which has meant most banks test whether customers can manage repayments if interest rates hit 7.25 per cent, which is much higher than the actual mortgage rates, currently sitting below 4 per cent for many owner-occupier borrowers.

This may be the biggest change of the lot.  Many more people will qualify for housing loans and it will make it significantly easier for people to borrow for Investment Properties.

The Australian property market has definitely had the hand brake taken off. So now is the perfect time for  investors as well as owner-occupiers to get interested in the Australian property market.

House prices are on the rise. Find out the value of your property now.

Get a free online property report from Hicks Real Estate. It takes seconds.

Hicks Real Estate is a Brisbane based, full-service real estate agency supporting buyers and sell as well as renters and property investors. With almost 20 years experience in the local market, we are the real estate experts you can rely upon.