They claimed this is the bottom of the cycle and all signs are pointing up North. Also, the record breaking of new first home buyers in the month of May breaking the record set 8 years ago.
All seems well & good. Certainly it has achieved the effect that the Government wants: keep the money rolling.
However, I wouldn't be too optimistic yet about what has happened recently. It's still too early to tell whether the property market has rebounded from its' loss. It could just be a minor push with the bottom still not too far away.
The first home owner grants will reduce significantly after Sept 09. If the only thing pushing the market heads above water now is the first home buyers, then I would be REALLY worried come October.
The good news is, as my previous posts, the FIRB has removed the $300,000 limit on overseas purchase. This has open the doors for mums and dads, new migrants awaiting PR and companies to purchase accommodations for their employees. So the market is driven by these 2 main factors technically, First home buyers and overseas purchasers.
If we're on the verge of rebounding strongly, then we should look at statistics for the houses/units above $500,000 too as those are the properties that wouldn't be affected by the First Home Owner Grants. If those units are performing well, then we can safely say the market is rebounding well. Last I heard, Toorak isn't doing very well!
Also, comparing the actual numbers of units on the market, this time around, the numbers are a lot less than previous years.
So if anyone of you are relying on this as an indicator of the property market, I would recommend that you be very cautious and do more than enough research to know the market. Don't get carried away! You could be in for a big surprise!
Nonetheless, if you found a good bargain, go ahead but stick with your budget or calculations. Don't overpay!
All eyes are now on post-September period to early 2010 where the grants are gradually phased out. Keep your eyes open.
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