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Lenders hold the key to new buyers: Gollan

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Australian Broker | 12 Sep 2012, 09:00 AM Agree 0
An industry veteran warns QLD’s new first home buyers’ scheme will have little impact without a radical overhaul of lenders’ practices
  • 1martym1 | 12 Sep 2012, 09:25 AM Agree 0
    Really. The policy has never been they have to save up the 5% in 3 months. Surely he knows this?
  • james | 12 Sep 2012, 10:14 AM Agree 0
    Have a look outside the big 4 is a good idea
  • Peter Wood | 12 Sep 2012, 10:52 AM Agree 0
    Another stimulus package which will only increase prices short term and leave first home buyers with negative equity over time !
  • Roger | 12 Sep 2012, 11:16 AM Agree 0
    This is a thinly disguised cash grab by Newman. The $10,000 new home grant was a failure with very little uptake. The FHB grant of $7,000 was by comparison very successful and enabled many stuggling first home buyers to enter the market. This change to the legislation just means less money out of state govt. coffers which is exactly what Newman wants.However I think it will backfire on him as it will inevitably mean less homes being sold in Qld. as it is the FHBs that fuel the buying chain. So less stamp duty for the Govt.
  • Paul Gollan | 12 Sep 2012, 11:28 AM Agree 0
    1martym1 you are totally correct. Say a first home owner is buying a home for $400,000 and borrowing $380,000 + LMI, many lenders would still look for 5% genuine savings. $20,000 sitting in a bank account for over 3 months would be considered genuine savings. A young couple paying say $1,800 a month rent and saving $1000 a month over 7 months with $7000 (1.75% of purchase price) in the bank to me represents a better risk if they allowed to use the $15,000 FHOG as part of their funds to complete, than borrowers who simply have $20,000 sitting in their bank account for over 3 months. Fortunately we are seeing lenders like Suncorp and many others already looking outside the square.
  • 1martym1 | 12 Sep 2012, 02:25 PM Agree 0
    Yes Ok Paul agree it is strange they wont allow FHOG to form the deposit when they will allow a gift (assuming rent is paid and is used in leui of gen savings).
  • Thomas | 12 Sep 2012, 03:26 PM Agree 0
    Brisbane is already overbuilt with units, and house and land packages are valuing horribly. Why inject further stimulus into that??? It will just increase prices short term as developers go for greed and gently lift prices to get a piece of the 15K. Every stimulus package in every state has resulted in that outcome every time. Unless human nature has changed- the same will happen this time. It hasnt mattered whether it was state or federal stimulus in the past- the results are always the same. And the end result this time will also be the same - a false eceonomy market created by false economy stimulus. We will see a short spike in prices that will only lead to more val problems and more supply into an already undervaluing, oversupplied sector. But worst of all, when the stimulus goes- more negative equity for the poor first home buyers.
    Cut levies on developers so land prices and build prices can come down- then cut stamp duties. Dont offer handouts. Offer savings. That's how you'll get prices back to affordable and then investors will show an interest again, leading to the oversupply being soaked up and new construction jobs getting started. But it will mean forfeiting revenue- I guess that's why they will never take the necessary steps.
  • Ange | 13 Sep 2012, 01:33 PM Agree 0
    @ 1martym1 - your confusing contribution with genuine savings - FHOG & Gift go towards contribution not genuine savings (unless the gift has been held by applicants savings for 3 mths)
  • 1martym1 | 13 Sep 2012, 04:25 PM Agree 0
    @ Ange, I am not confussed. I am saying they will allow rent paid in leui of 5% gen savings proof as long as the borrower also has a minimum of 5% in the bank at time of application from gift usually. FHOG is generally excluded in the calculation of the 5% minimum ie you cant use rent paid in leui of savings and have the 5% contribution come from part FHOG. Yes you can use the FHOG above the 5% but it cant be part of the 5% with most all lenders.
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