As new figures on the first home buyer market reveal numbers are declining, Aussie chairman John Symond says those that bought when the sector was "out of control" last year, ended up paying inflated prices.
"In many metropolitan areas, prices for properties in the first home buyer range were inflated due to increased demand," Symond said. "Over-excited first home buyers were paying up to $50,000 more for a property just to get their $14,000 grant."
"There were stories coming out of the property market of queues of people lining up for open houses and real estate agents not even allowing prospective buyers to view homes unless they had proof they had their finances approved. This was a crazy situation and one which can only lead to inflated prices," he added.
Even though the boosted grant has now ended, Symond said first home buyers, who missed the opportunity to enter the property market in 2009 were in the "prime position to make their first purchase, particularly in the new home sector, as the FHB market returns to more 'normal' conditions in 2010".
"For those worried they may have missed the boat with the bonus grant, I believe they are now the ones in the best position to negotiate a good price on their first home," he said. "If I was a first homebuyer I would have waited until the bonus grant had ended, because now is the smart time to buy."
Symond said the Reserve Bank's recent decision to hold interest rates stable following its February meeting, and subsequent comments from Governor Glenn Stevens pointed to rates being kept at relatively low levels for some time.
ABS statistics show the percentage of FHBs as a percentage of owner occupied purchasers dropped from 28.5% in May to 22.1% in November.
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Steve on
12 Feb 2010 02:23 PM
Why didn''t John Symonds tell First Homebuyers to wait and not buy when the grant boost was at $14,000?