First Home Buyers Grant Reduces

At the end of this month the first home buyers grant reduces from $14,000 when purchasing an existing home to $10,500. This should not be seen as a reason for first home buyers to panic. When looked at in the cold light of day it should have little or no effect on your decision to enter the housing market. The reduction of $3,500 compared to the start of the year when buyers were often in bidding wars and / or races for contracts it may actually be a better time to buy now than it has been over the last 6 months. You will not have quite the same pressure to make a snap decision about your biggest purchase ever, and your bargaining position may be better if there are not as many other purchasers out there.
 I do believe that the next 3 months is a good time to secure your first home as there may well be a lift in prices before too long. This will mainly be due to a supply and demand imbalance. The new home starts in the Illawarra continue to be at record lows which will bring further pressure on existing houses. Basic economics states that if more people want to buy a commodity than there are of those commodities on the market, prices will rise. We are already seeing a drop in the number of existing homes on the market compared to the normal influx of spring activity so this points to price rises in the future.
 The prospect of interest rates rising again will make some people nervous however the commentators seem divided as to when & how much they will rise. It is inevitable that they will rise of course, they are at historic lows, but it is my belief that the rises will be very cautiously implemented by the Reserve Bank as they are unsure about the global outlook and will definitely not want to be blamed for stalling the Australian economies recovery.