We fire four quick questions at CoreLogic’s head of research Asia Pacific, Tim Lawless
By: Charlotte Hartley-Wilson, Dec 2019
In an attempt to boost the number of first home buyers, January 2020 will see the Federal Government allow first homeowners to purchase a property with a deposit of just five per cent and avoid paying Lender’s Mortgage Insurance on their loan, with the Government effectively acting as guarantor.
Although the finer points of the First Home Loan Deposit Scheme (FHLDS) have not been announced, realtors, lenders, investors and homeowners have all voiced concerns regarding the scheme’s potential to disrupt the market.
At the centre of the discussion is the concern that an increase in the number of first home buyers as a result of the scheme will inflate property prices. Some are also worried that property sales could fall through if first home buyers purchase a property but do not secure a place in the scheme.
CoreLogic is the largest provider of property information, analytics and property-related risk management services in Australia and New Zealand.
Q&A with Tim Lawless of CoreLogic
State Custodians caught up with Tim Lawless, CoreLogic’s head of research Asia Pacific to discuss how the FHLDS will affect the market and the hidden opportunities for homeowners and investors in 2020.
As Tim notes, overall it seems that the scheme is unlikely to disrupt the property market. So, what should you look out for?
Ultimately, while housing prices are likely to rise, growth in household incomes is expected to remain weak, renewing housing affordability pressure in markets where home values are rising faster than incomes.
Looking forward, this is good news for next home buyers and investors as it’s possible that first home buyers will reduce as a proportion of overall market activity, and that there won’t be a substantial boost to housing demand as a result of the first home buyers’ scheme.
The opinions expressed in this article are the opinions of the author(s) and not necessarily those of State Custodians. The above is general commentary only and is not advice tailored to any individual’s financial situation. We recommend seeking advice from a finance professional before implementing changes relating to your finances.
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