Post Election Summary & Immediate Outlook
What a month May has been. While the country and certainly our state held their breath waiting for the election outcomes – it has now seemed to have brought at the very least – confidence and some stability.
Overall, a net positive for housing and finance markets nationally.
- Confidence to make high commitment decisions has improved.
- Immediate legislation for tax cuts for individuals earning less than $126k
- Certainty around budget announcements, including a 25% lift in infrastructure spending (including $1.6 billion for WA road and rail projects) and better GST allocation for WA
- Investment related tax reform is off the agenda (negative gearing / capital gains tax concession).
- First home buyers will see some mild stimulus from the FHB deposit scheme.
- Add in the high likelihood of rate cuts over the coming months and we may see the housing market trough brought forward.
In the latest announcements we are now waiting for the flow on effects from the APRA announcements of reducing the buffer rates banks are using in their assessments of finance applications and any rate reductions that may come.
Finance constraints has certainly contributed to the availability of funds and therefore property purchases. What you could borrow 2 years ago – you can longer do that today.
While the proposed First Home Buyers Deposit scheme once it goes live will give some stimulus – it is currently restricted to only 10,000 applications. Hopefully that will be increased.
Hopefully once this program goes live (not yet available) we will see some more first home buyers able to achieve their first purchase.
For those unsure of the details – At the moment if you have less than 20% deposit you will incur lenders mortgage insurance (which is added to the loan) and can be expensive.
The government will now look to guarantee that on your behalf to the banks which means you will only require 5% deposit and not have to pay the for the lenders mortgage insurance. A great saving – however only limited at this stage to 10,000 applicants.
For those who are not aware – we do have options available right now. We have Keystart.
If you are looking to purchase a property to live in – then you can look to borrow with only 2% deposit (whether you are a first home buyer or not) without paying mortgage insurance.
Keystart recently increased their income thresholds to allow more people to qualify. Terms and Conditions do apply.
Read more about this in our Keystart Announcement blog.
If you would like a confidential chat about your situation or to see if we can help you in a home of your own sooner, contact me on 0418 903 954 or donna-lee@celsius.com.au
warm regards,
Credit Advisor
Celsius Finance