The Federal Government initiated several incentives for First Home Buyers to improve construction activity in the new home market. With recent changes to Grant amounts, there are still quite a few healthy Grants on offer. Below is a quick summary for NSW property purchases:

Grant Offer 1) First Home Buyer purchasing an established home to live in:

v  $7,000 First Home Owner Grant until 30/6/2010

v  $3,500 Commonwealth Boost available until 31/12/2009

v  First Home Plus Stamp Duty Exemption up to $500,000 (up to $17,990), and sliding scale to $600,000 up to 30/6/2010

Example 1: Total Benefit if you exchange on a $500,000 property by 31/12/09 = $28,490

Example 2: Total Benefit if you exchange on a $500,000 property by 30/06/10 = $24,990

Grant Offer 2) First Home Buyer purchasing a new home to live in:

v  $7,000 First Home Owner Grant until 30/6/2010

v  $7,000 Commonwealth Boost available until 31/12/2009

v  $3,000 NSW Supplement until 30/6/2010

v  First Home Plus Stamp Duty Exemption up to $500,000, and scaled to $600,000 up to 30/6/2010

Example 1: Total Benefit if you exchange on a new $500,000 property by 31/12/09 = $34,990

Example 2: Total Benefit if you exchange on a new $500,000 property by 30/06/10 = $31,990

Grant Offer 3) Any Home Buyer or Investor….. up to 31/12/09     50% discount on Stamp Duty for a new home/unit.

v  The NSW Housing Construction Acceleration Plan (HCAP) halves your Stamp Duty on a purchase of a new home up to $600,000. It is available to anyone who doesn’t qualify for the First Home Buyer grant, and it is unlimited so you can buy 50 new homes and pay half the stamp duty on all of them.

Example 1: Total Benefit if you exchange on a new $500,000 property by 31/12/09 = $8,995

Things to look out for: There are conditions to receiving the grant, deadlines to meet, and all states have different amounts on offer.

Need more info? : If you are thinking of buying property in the next six months, Call Plan Assist’s Loan Advisor Team on 02 9449 2333 to learn how you can receive these Grants.

The Reserve Bank (RBA) has increased interest rates by 0.25 of a percent (25 basis points) taking the official cash rate to 3.25%. This is the first time rates have gone up since March 2008.

Strong retail sales, rising consumer confidence and a rebound on share markets worldwide has the RBA at the ready to lift rates.

”Economic conditions in Australia have been stronger than expected and measures of confidence have recovered,” Glenn Stevens, governor of the RBA said.

”The global economy is resuming growth, with economic policy settings likely to remain expansionary for some time, the recovery will likely continue during 2010 and forecasts are being revised higher.”

”Growth in China has been very strong, which is having a significant impact on other economies in the region and on commodity markets.”
The central bank does not want the economy’s overall health to be threatened by underlying inflation or unsustainable borrowing activity, which can be triggered by low rates.

Following the announcement all four of the big banks – Commonwealth Bank, Westpac, National Australia Bank and ANZ – said they have placed their variable interest rates under review.  CBA, NAB, and ANZ all have today passed on the 0.25% increase which means an increase of $40 per month to the average monthly payment for the typical $300,000 mortgage. The extra cost may stretch some household budgets at a time when unemployment remains on the rise.

Analysts say that more increases are on the way, with many predicting the official interest rate could be as high as 4.0% to 4.5% by the end of next year.
Mortgage holders, if they have not already done so, need to prepare for the predicted increase in rates.

To find out how to prepare for the coming increases, call Plan Assist on 02 9449 2333 to speak to our Loan Advisor team.

Harry Charalambous, founder of Plan Assist, explains how simple a property option can be.

Harry frequently assists investors in acquiring property using property options and has become an expert with negotiating and securing favourable terms when purchasing.