Home loan demand falls for fifth month

The Reserve Bank of Australia (RBA) will raise the cash rate one more time before giving borrowers a long reprieve, economists say, after new data showing that housing finance commitments fell for the fifth straight month in February.

Australian housing finance commitments for owner-occupied housing fell 1.8 per cent in February, seasonally adjusted, to 50,287, the Australian Bureau of Statistics said on Monday.

It was below market forecast of a 1.0 per cent fall in the month and was the fifth straight month of decline.

ICAP economist Adam Carr said the lending data would concern the RBA, causing the Bank to reassess the pace of future interest rate rises.

“It’s pointing to a sharp, broad-based decline in lending activity,” Mr Carr said.

“That would suggest to me that we’re getting to the point where the pace of rate hikes will slow, markedly.

“The RBA will only hike once more and then ease off.”

The central bank has lifted the cash rate five times in the past seven months.

The current interest rate is 4.25 per cent.

Meanwhile, RBA assistant governor Guy Debelle told a Senate committee in Sydney the central bank isn’t trying to suppress demand by raising interest rates.

“We’re trying to ensure growth is at a sustainable pace,” he was reported by Bloomberg to have told the Senate Inquiry into Access of Small Business Finance.

Mr Carr said Monday’s ABS data showed activity already was being dampened.

“It’s already happening,” he said.

“So I would imagine that there’s not a lot left in the tightening cycle in the near term at least.”

He could not predict whether the bank would next raise the rate in May or June, however.

Up to $2,000 towards your fees!

Home Buyers Assistance Account

The Home Buyers Assistance Account is established under the Real Estate and Business Agents Act 1978 to provide first home buyers with financial support.

 The scheme provides a grant of up to $2,000 for the incidental expenses of first home buyers when they purchase an established or partially built home through a licensed real estate agent for a purchase price of $400,000 or less.   

  

The scheme is funded from interest paid on real estate agents’ trust accounts. The grant can be used for — mortgage registration fees, solicitor and/or settlement agent fees, valuation fees, inspection fees, loan establishment fees, mortgage insurance premiums and lending institution fees associated with lodging the application.

 

Application criteria:

• applicants must be buying their first home, which is established or partially built (not vacant land, a plan or a ‘house and land’ package);
• the applicant, spouse or partner of the applicant must not own or have owned any property in the State of Western Australia before (if one of the people the applicant is buying a home with, owns or has owned a home in Western Australia before, then the applicant can apply for a partial grant based on the percentage of their ownership of the home);
• the applicant must live in the home for at least the first 12 months;
• the applicant must purchase the home through a licensed real estate agent;
• the application must be lodged with the Registrar of the Real Estate and Business Agents Supervisory Board no more than 90 days after the date that the offer and acceptance contract to buy the home is accepted (in exceptional circumstances, a short extension of time for lodgement may be granted by the Registrar if reasonable grounds exist);
• the home loan must be financed through an authorised lending institution (such as a bank, building society or credit union); and
• the purchase price of the home is $400,000 or less. 

Your mortgage broker can supply the application form…this application cannot be processed until settlement and will need to be applied for by you. Complete form 1 and forward to your Lender along with

• a complete copy of the signed contract to buy the property (Offer & Acceptance) 
• a copy of the final settlement statement prepared/provided by your settlement agent. 

First Home Owners Grant (FHOG)

The First Home Owner Grant or FHOG is a one-off grant payable to all first home owners that meet the eligibility criteria (see below). 

For eligible first home buyers the First Home Owner Grant (FHOG) provides $7,000 towards the purchase of an established or new  home.

To be eligible for the First Home Owner Grant WA you must be an eligible person (eg. not a company) and have entered into an eligible transaction.

• Applicants must be at least 18 years of age
• At least one of the applicants must  be an Australian citizen or permanent resident
• Applicants must not have previously received the First Home Owner Grant or have a spouse (or defacto) who has previously received the First Home Owner Grant
• Applicants and/or their spouse (or defacto)  must not have previously owned residential property anywhere in Australia prior to July 1st 2000.
• Applicants and/or their spouse (or defacto)  must not have previously purchased and occupied residential property anywhere in Australia as a place of residence on or after July 1st 2000.
• Applicants and/or their spouse (or defacto) must live in the home for a continuous period of at least 6 months, commencing within 12 months after completion or settlement.
• The Purchase price of the property must not be greater than $750,000 (south of the 26th parallel) and $1,000,000 (north of the 26th parallel)