Friday, April 17, 2009

Be nice to first homebuyers, they're keeping the economy ticking

A recent article suggests that first homebuyers are the ones keeping the economy ticking along in these uncertain times. 

"THE smattering of economic data since early March suggest first-homebuyers are the only people doing their bit for the Australian economy.

Armed with a generous grant from the government and extremely low mortgage rates, home buyers are piling into the housing market and fulfilling a dream of owning the roof above their heads. 

And with interest rates destined to go even lower in coming months, more people are likely to take the plunge. 

"It's really the only flicker of life out there," Nomura Australia's chief economist Stephen Roberts said. 

The standard variable home loan rate stands at under six per cent when just eight months ago it was above nine per cent. 

Furthermore, HSBC introduced a 12-month introductory rate of just 3.99 per cent, the lowest level seen since the 1950s. 

Money is cheap. 

More than 42,000 people have taken up a grant since the government introduced a more generous scheme in October as part of its $10.4 billion stimulus package. 

As of January, first-hombuyers made up a record 26.5 per cent of new home loans being granted. "

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