Dear Clients, Associates and Friends
Welcome To Our De Freitas & Ryan Monthly "E" News Update
Interesting times in the lower end of the market.
When the government had the incentive of the first home buyer grant in play, the whole overall market seemed to benefit as once the lower end of the market was stimulated it worked its way up through all the overall pricing levels of homes. One year on from that it’s really interesting to see what has resulted since the first home buyers incentives were been reduced.
Now before I start you might think I am being a bit cynical; however I do believe I have my fingers on the pulse being at the coal face of the real estate market.
Firstly since the incentive has been reduced there has been a large increase in the people having their properties re-possessed as mortgage payments have not been kept up. It is a sad situation if people have over extended themselves and they are forced to sell their home. The other thing is that due to the depressed state of the market, its highly probable, that there will be a negative equity situation with the homeowner walking away with a debt as well as no home.
In the meantime the state government are calling on all estate agents to find homes for them to buy as they have a government direction to purchase 215 homes in the next financial year. Obviously they will be able to take advantage of the buyer’s market, which they have genuinely been a "big player" in themselves, very interesting.
I firmly believe that it is a vital part of our social fabric that young families are encouraged into home ownership. I also firmly believe that home owners need to have the constant threat of interest rate rises removed from the home ownership equation. Surely the government can see the benefits that home ownership brings to our society and the biggest "turn off" for home owners is the constant threat of interest rate rises. Why can’t people’s superannuation fund become part of the home ownership dream instead of the home ownership nightmare that it is become today.
There needs to be a be a rethink on incentives in getting people into home ownership, otherwise our society faces the real risk of young people’s attitude being "it’s all too hard" and becoming either private or government housing renters for the rest of their lives.
In our office today we have a high amount of activity in our leasing departments and a much lesser amount of activity in our sales department. Residential rentals are beginning to rise while sale prices of homes are remaining flat. It’s only a matter of time that all this rental activity will have a positive effect on the sales market, but when we don’t know.
In the meantime our governments should be monitoring the "home ownership situation" as we really should never lose sight of the pride we all have in home ownership and all the social benefits that flow from that.
We’ll catch you again next month and thanks for taking the time to read our newsletter.
The Team at De Freitas & Ryan
