Property: Price-rise predicted
Property reporter Natalie Craig says the vital signs for a price-rise are looking good.
First-home buyers have ignored the impact of the global financial crisis, snatching up new homes at a record rate in May and beating the previous record set almost eight years ago.
In May, 4946 Victorians bought their first home, taking advantage of state grants and the Federal Government's first-home buyers' boost. In October 2001, there were 4569 first-home applications.
The May figure - totalling $91.5 million - is up 14.8 per cent on the April figures and a whopping 67.5 per cent compared to May 2008.
Much of the boom is concentrated in Melbourne's north and west, with Derrimut, Point Cook and Werribee leading the charge ahead of Craigieburn and Roxburgh Park. Hoppers Crossing, Tarneit and Truganina came in next with Cranbourne and Skye on the city's outer south-eastern fringe pulling into fourth place.
"Each of these new homes means more jobs for carpenters, electricians, builders, plumbers and other Victorian tradespeople as we fight the impact of the global recession," Treasurer John Lenders said.
"Building new homes with assistance from our governments will also help increase Victoria's housing stock, taking pressure off the rental market."
The Housing Industry Association's Victorian Executive Director Gil King said the the best was yet to come.
But his prediction comes despite expectations the Reserve Bank's current cycle of rate cuts has ended - as well as the fact that at the end of September, the Federal Government first-home buyers' boost will be halved before it peters out at the end of the year. And last week, the Commonwealth Bank announced it would up interest rates and other banks could follow suit.
In October, Prime Minister Kevin Rudd unveiled a tripling of the grant to buyers for newly built houses to $21,000 as part of the first economic stimulus package.
"The increased grants have been crucial for the survival of our industry, for aspiring first home owners and for boosting much-needed housing supply," Mr King said.
"HIA believes that the number of first home buyers purchasing new homes will continue to soar to record levels between July 1 and September 30, where the combined federal and state grant increases to an unprecedented $32,000 for a new home in metropolitan Melbourne and $36,500 for a new home in regional Victoria."
The Master Builders' Association, however, urged would-be first home buyers to exercise a degree of caution. A spokesman said home sales were always good for the industry but tough economic conditions had to be factored in by people before they bought a house.
The Brumby Government has extended its scheme, at a cost of an extra $125 million, to offer $22,500 to first-home buyers snapping up homes in regional areas, $18,000 for a new home in metropolitan Melbourne and $9000 for an existing home as of 1 July this year.
Victoria's stamp duty rates, which apply to existing homes, are among the highest in the nation.
Data out last week from the Australian Bureau of Statistics showed first-home buyers accounted for 28 per cent of all owner-occupied housing finance commitments during April. That was the highest share of total housing loans since the ABS began compiling figures on the issue two decades ago.
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