Golden opportunity for first home buyers in Townsville
FIRST homeowners are breaking into the Townsville property market with it cheaper to buy than rent in the region.
The Reserve Bank of Australia slashed interest rates for the second time in two months on Tuesday, dropping it by another 25 basis points to a historic low of 1.00 per cent.
First homebuyer Melanie Cerutti who recently bought a property in West End, said the interest rate cuts made her repayments cheaper than the rent she would be paying and gave her more breathing space financially.
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“It just frees up cash for me really, if you work it out weekly my repayments are much cheaper than what I was paying in rent,” Ms Cerutti said.
“I bought because property prices were at a good stage and interest rates were expected to drop.
“I think I bought just at the right time now that Adani’s gone ahead.”
M Property agent Emma Nancarrow, said the second interest rate cut revealed a ‘golden opportunity’ for young buyers.
“It’s a bit too early on to tell if the first cut has made a difference in activity yet, but I think young people have a golden opportunity to get into the market,” Ms Nancarrow said.
“I think this second one will stimulate the first homebuyer and maybe even get established homeowners go back to their current lender and find out what they can do.
“It may encourage them to renovate or make changes to their properties.”
Insights manager at Finder, Graham Cooke, said the average mortgage holder is set to save thousands on the life of their home loan if banks pass on both cuts.
“It’s great news for homeowners,” Mr Cooke said.
“It’s two down and maybe one or two more to go.
“On an average mortgage, if your bank passes on both rate cuts in full — that is a 50 basis point reduction — you could be saving almost $42,000 over 30 years.”
A report released in June by ANZ and CoreLogic also revealed, the housing market in Townsville is more affordable for those borrowing or saving for a deposit than those renting.
Homeowners in the region could be saving 3 per cent more of their income to service a mortgage than if they were renting, with a 20 per cent deposit for property in the region taking 5.2 years to save on average.
The report which used housing data from last December, did not consider the recent rate cuts, meaning it could now be even more affordable to buy.