Home' Domain South Coast Register : September 2nd 2009 Contents 4 - Wednesday, September 2, 2009
Domain.com.au supplement to the SOUTH COAST REGISTER
Where is the first home owners grant
The grant isn't going anywhere but it is
being reduced to normal levels from
October 1. Fir st-home owner s who sign a
contract to buy a home from that date will
receive an extra $3500 instead of the
current $7000 and those who buy a new
home will be eligible for an extra $7000
instead of $14,000. After December 31, the
First Home Owner s Boost will stop and
fir st-home buyers will be eligible only for
the standard grant of $7000.
So if I buy a new home before
October 1, the Government will give me
$21,000 but if I leave it until 2010, I'll get
only one-third of that?
That's right.The First Home Owners
boost was an incentive to stimulate the
economy. Generous as it was, it was only
intended to be a shor t-term measure.
What do I have to do to get in before
Eligibility is based on the date the
contract is exchanged, so to get the full
boost, the last date you can enter into the
contract is September 30. If you are buying
a new home, building must star t within
26 weeks of the contract and be
completed within 18 months. If you're an
owner-builder, construction must star t
before the cut-off dates and be completed
within 18 months. If you're buying off the
plan, the contract must specify a completion
date on or before December 31, 2010, for
the $14,000 boost if the contract was made
before June 30 this year.
Or March 31, 2011, if the contract was
made between July 1 and September 30.
Contracts made after October 1 must
specify a completion date on or before June
30, 2011, or be completed by this time .
You'll need to meet the standard
requirements for the first-home buyer
grant, such as being over 18, not having
previously owned or had an interest in an
Australian residential proper ty and at least
one of the applicants living in the home
for at least six months on a continuous
basis within 12 months of the transaction
How do I apply?
You can get a form from your state's
revenue depar tment. Check out the NSW
Office of State Revenue at osr.nsw.gov.au or
phone 1300 130 624; the Victorian State
Revenue Office at http://www.sro.vic.gov.au
or phone 132 161; or the ACT Revenue
Office at revenue.act.gov.au or phone
(02) 6207 0028. Each state also has its own
concessions for fir st-home buyer s.
Will proper ty be cheaper after this?
It's hard to say but the fir st-home buyer
end of the market has gone gangbuster s,
despite pressure on prices in other segments
of the market.
By Alex Brooks
IT'S OK to be mental. My old friend Emma said so.
Dr Emma Baker has discovered the not-so-
surprising tr uth that people who pay more than a
third of their income in either rent or mor tgage
payments are more likely to have mental health
And not just because they are eccentric. Housing
stress is one of those things that gets the better of
most of us. (I'm sure the founder of Lehman
Brother s in Australia didn't feel too relaxed about
selling his $18 million harbourside Sydney home for
$10 million, even if he wasn't paying one-third of his
income in mor tgage payments at the time.)
But does the Australian government really worr y
about such things? Or would they rather hand out
politically-pleasing fir st home grants that fuel house
prices to the point where the Reser ve Bank
Governor speaks out about how "disturbing" it
would be if Australian house prices kept rising?
BIS Shrapnel is predicting 200,000 first home buyers
will have entered the proper ty market this year,
making the great leap from renter to owner ...or
should that be renter to the owner of a large debt?
The average fir st home buyer mor tgage is $281,300
compared to $266,900 for other home buyer s,
according to the Australian Bureau of Statistics. And
these averages hide the many households where
two people work and happily take on a $400,000
or $500,000 mor tgage.
While most of us want a roof over our head in our
old age - especially since Tony Abbott's proposing the
pension age be raised to 70 - are we all thinking
clearly about the nature of the debts we are taking
Banks are making us think twice by tightening their
lending criteria back to at least a 5 per cent, ideally
10 per cent deposit. But are first home buyer s,
upgraders and investors thinking about the reality of
the 25 or 30-year debt sentence that is a mor tgage?
It's all well and good that house prices have
recovered their losses and we are back to thinking
proper ty is as safe as houses, but have we forgotten
that interest rates are at 49-year lows and will
eventually return to normal levels of 8 per cent or
8.5 per cent rather than the 5.8 per cent now?
Professor Steve Keen is one of the doomsayer s still
proclaiming house prices will drop 40 per cent. He
says people taking out mor tgages should be
conser vative with debt and banks need to go back
to the lending criteria they used pre-1964!
"A debt ser vicing level that equates to a maximum
of 30 per cent of the disposable income of ONE
income earner, and a maximum loan to valuation
ratio of 30 per cent would represent a much lower
level of debt than is commonplace today---and it
would be reflected in lower house prices," he says.
SQM Research's Louis Christopher thinks that's a
load of hogwash, and says people with mor tgages
need at least a 10 per cent deposit as a "buffer" and
should be prepared for mor tgage interest rates to
rise by at least 2 per cent.
If we look at the Australian median house price,
which Australian Proper ty Monitor s says is currently
$484,308, and you have a 10 per cent deposit and
borrow the remaining $435,878 at today's variable
rate of around 5.8 per cent then homeowner s need
to repay around $2750 a month. If interest rates go
up by 2 per cent, home owner s need to cough up
$3290 a month.
That mor tgage payment costs around $760 a week,
way more than the median rents for a 3-bedroom
house although not out of the question in many
suburbs of Melbourne, Sydney and Brisbane.
BIS Shrapnel's proper ty analyst Jason Anderson
suggests taking on mor tgage debt that's comparable
to rental payments. "If the mor tgage you can pay is
similar to the rent, then buying becomes the right
thing," he says.
Talking property with domain.com.au
Is it mad to take on a big mor tgage? How much debt is OK
Selling your home?
By MELINDA HIGGINS
IF you are thinking of selling your home and
want to achieve the maximum price, there
are a few things you should keep in mind.
In a tight market, it's the little things that
matter even more.
So, where to begin?
The aim is to make your home look as
livable and attractive as possible and where
home buyer s are concerned, fir st
Ever yone is limited to a budget, but there
are things you can do that won't cost you a
cent, and will still add value and appeal.
Quality presentation inside and out is
essential, according toTina Fernie, principal
of LJ Hooker Nowra.
"If a house is untidy and dir ty it obviously
proves a lot harder to sell."
"Spending a bit of time in the garden and
generally cleaning and tidying costs nothing,
but goes a long way."
If your home is already for sale, make sure
that it looks as good as possible at all times.
Make sure the grass is mowed, the
windows and door s are clean, that gutters
are clear, paths or driveways are swept,
leaves raked, and gardens are weed free.
Get rid of unnecessary clutter that may be
laying around by either storing or throwing
away. Make sure trees and shr ubs are kept
pruned and tidy to maximize air and light
and improve the overall appearance of
If you live in an area that is prone to, or if
there are areas of the home that are prone
to growth of moss or mould, ensure this is
removed by scr ubbing (using bleach if
A lawn can make a big difference to the
overall appearance of home. A bag of
lawn food applied on a rainy day and some
lawn seed to patch up any bare spots, can
work wonder s.
Buyers look for homes they can envision
living in, so strive for a neutral balance
within the atmosphere of the home.
A potential buyer needs to be able to see
themselves and their family living in the
home, which means a seller should strive to
create an atmosphere that is homely, but
not over the top.
Simple furnishings, and maybe a couple of
family photos here and there are okay.
Don't put a million photos of the family on
ever y available shelf or clutter the decor
with too many vases of flowers or
decorative pieces, par ticularly if this isn't in
line with the usual decor of the home.
Clutter can turn potential buyer s off by
making the home seem cramped, and can
make spaces seem smaller than they
"If there is too much furniture or a lot of
clutter, it minimises the size of the rooms,"
Make sure everything is dusted, vacuumed,
polished and as clean as possible. Mess and
dir t is not an alluring feature.
"Aim for an inviting atmosphere, make sure
ever ything is put away, beds are made. It's
impor tant to keep the blinds and windows
open, even lights on so ever ything is kept
nice and bright."
Smell is another impor tant aspect
"You don't want to go into a house
without a nice smell -- It needs to smell
fresh and clean."
Providing you have the cash, a new coat of
paint can work wonders (especially if it has
been a while since the original coat),
though Tina believes this is usually not an
"Repainting is not really a big issue as most
buyer s will be repainting regardless".
Also, keep in mind that worn guttering,
rotting fence posts or holes in the wall
need to be fixed, or could potentially lower
the market value of the home.
It's a good idea to make sure your home is
being marketed to its highest potential.
Ensure you are happy with photos that are
used for all adver tising and if not get your
agent to take others.
Finally, don't forget to ask your agent for
any additional tips and suggestions they
Things to remember
Keep ever ything neat and tidy both inside and out (in case of
potential buyer drive-bys).
Choose photos that emphasise the best aspects of your home
for adver tising.Take photos when conditions are right, for
example , a rainy overcast day is not the best time. Morning or
afternoon are best for outside photographs. Inside, make sure
there is ample light.
Do what you can relative to budget, to improve market value .
Make sure inside is not cluttered and is open, breezy and light --
filled, with a smell that is clean and fresh.
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