Katrina Parrington

Mortgage & Finance Broker, Elders Home Loans – Northern Territory – P. 8932 8900

  • Enter your email address to subscribe to this blog and receive notifications of new posts by email.

    Join 1,742 other followers

  • Elders Home Loans

  • Katrina Parrington

    I am a long term Centralian resident with more than 18 years experience in the financial services industry. Initially, in Real Estate in Adelaide before pursuing a career with Elders Insurance Alice Springs and lending roles with major banking institutions where I gained extensive experience in Home Loans and Commercial Lending here in the Alice and in Darwin.

    I have a unique set of skills that ensures I understand your lending needs and can provide you with professional advice and personal service.

    Tel: 08 8953 8800
    email: katrina.parrington@eldershomeloans.com.au

NT Government Must Re-Think Housing Affordability Across the Territory

Posted by Katrina Parrington on May 6, 2015

The reserve bank of Australia has taken a national perspective on the economy by taking the brave step of cutting theEldershomeloans_0014 - Copy interest rate once more.  This decision was taken despite the strong rise in Sydney property prices.   Trends in other cities and Australian towns are varied.

Interest rates are at incredible lows but as well as the Reserve Bank making adjustment,  the NT Government must consider what adjustments it can make to help home owners into their first home and to stimulate competition in business to make home ownership more affordable overall.

Home buyers face considerable challenge.  Stamp Duty in the NT is approximately 4.78% of any real estate transaction.  Financial institutions ask home buyers to save a minimum of 5% to obtain a home loan.  Unfortunately in the NT they must save 5% for the bank and nearly 5% for the NT Government.

If the buyers are first home buyers they are eligible for the $26k First Home Owners Grant (FHOG) which will ease the burden but only if the property is new.   First home buyers are dissuaded from buying older stock in the market.  This was not always a condition of the grant.

NT Treasury recently received a visit from a Sydney based Economist.  He posed a question to Treasury officials regarding the decline in home loan finance approvals for the period Jan 2015 to March 2015. The muffled response, “First Home Owner Grant”.

“So what happened to the FHOG in this period he asked” and was told that the FHOG is now only available on new or substantially new homes and not available for established homes.

What does this mean for the NT?

Alice Springs, Tennant Creek and Katherine do not have access to swathes of new land for development and the cost of building a new home in the NT is astronomical.

My personal experience illustrates the point.  I’ve bought a block in Darwin and am now trying to build a home.  Not the Taj Mahal just a 3 or 4 bedroom home with the basics.  Found a great plan for a tropical home in Cairns cost to build $330k.  Same home, same design cost to build in Darwin up to $600k build only.

I would urge the NT Government to consider stimulation of the economy across the Territory and not just the construction industry and take a broader look at the FHOG to include older properties, if not in Darwin then most certainly everywhere else.  This will serve to improve affordability and choice for those people entering the market and trying to secure their first home.

Increased interest from home buyers will enable a fresh start for a number of months if not years for first home buyers and investors to take advantage of historically low rates.  People will still have strong yields in the NT and with rates this low money invested in bricks and mortar will continue to deliver stronger returns than cash in the bank.

Interest rates are expected to remain low with potential for a further rate cut.  If you want to pay your home off and relieve debt longer term my tip here is to keep your repayments at their current level this strategy will save you $$$ in the long run.

Sorry, the comment form is closed at this time.

%d bloggers like this: