We had an election where one of the choices we had to make, in relation to housing, allowed one generation in the population to benefit only at the expense of others.
What we chose instead though is to the benefit of every generation – yes that is possible.
First Home Buyers are the BIGGEST winners.
The cash deposit required has been the largest hurdle for them to overcome. Until now First Home Buyers have needed to find 5% of purchase price PLUS costs to get those keys to the front door. Mortgage Insurance (of around 3.5%) was the biggest cost. On a $500k purchase – this meant they had to find $42,500.
The new bipartisan policy now waives the need for Mortgage Insurance to be paid – this immediately drops the amount to be found down to $27,500
Read here for specific details …https://askalanheath.com.au/95-loans-an-update/
People who already own their home are winners.
There was a proposed policy that was going to lead to an investor strike. This potentially removed up to one third of available buyers from the market. The thought of this policy coming into play was already depressing the market. If this policy had come into play, then the depression would have been accentuated.
House sales were down 35% nationally. In simple terms – nobody’s phone was ringing.
Two days after the election this cloud has been lifted.
Interest rate cuts are also firmly in play.
Two days after the election my phone is ringing again – confidence in the future has returned.
People who wish to buy an investment property are winners.
The existing rules around investment will now continue. This is so important. People who choose property to save for their retirement know that this strategy can take 10-20 years to come to fruition. It was always grossly unfair to change the rules on people who are simply doing their best to try to be financially independent in their later years.
People who rent are winners.
If new rules for investors had been imposed on the market, then the investors who remained would have been perfectly entitled to recoup the additional costs from the only people who were left … their tenants. With less investors – and less properties for rent – supply and demand would have forced rent up. This isn’t fiction – it was tried before in 1985 by Paul Keating and the policy was reversed in the lead up to a NSW State Election because of the outcry from tenants!!
Everyone who borrows are winners.
One side of politics wished to force all consumers to pay their broker out of their own funds under the guise of “transparency”. When this was obviously not going to succeed, they decided to reduce the amount that the lender can pay for a loan under the guise of “fairness”. The broking industry as a whole has to pay for compliance, record keeping, ongoing training, rent staff. A broker does not receive what the bank pays. This proposal would have shut down the broker industry – this is not an exaggeration.
Australia spoke – the other side of politics could see that with 60% of all loans now being done by brokers and with rates at all-time lows that far from being “broken” – the broking industry was calling banks to account and forcing them to be accountable for their charges.
Your broker can continue to operate – the whole country is the winner.
I did not want to believe that I lived in a country that set parent against child and grandparent – that one could only benefit if another lost.
It turns out that is not Australia.
You are all winners.
As always if you would like advice specific to your own personal circumstances, please call or email anytime, it’s what I’m here for.
Just Ask Alan – Your online mortgage broker.