The Reserve Bank of Australia has officially reduced the amount of interest rates to a historic low of 1.5% over the last few days. This is good news for first time home buyers in Sydney and Melbourne. Although banks have not passed the RBA rate cut-on in fall, Sydney was able to go over the 80% mark which was better than last year’s 78.3% during the peak of the residential market.
Eastern suburbs of Sydney faced consistent demand from home buyers and national auctions preliminary cleared at 74.9%, the highest rate for the year beating last week’s 72%. Melbourne was equally strong at 76.1 clearance rate, just a few points shy from last year’s 78.5%.
However, the best among the best was not actually an investor sale or first home buyer but the $6.4 million sale of Bill Granger’s four- bedroom beachfront property at Tamarama, one of Sydney’s eastern suburbs. The home was bought by Granger in 2014 for $4.8 million but he decided to sell the property because he wanted to spend more time in London. The property includes an entertainer’s terrace overlooking a panoramic view over the Bondi to Bronte Coastal Walk.
Because of low interest rates, first home buyers and investors are actively bidding during the weekends. Investors on the other hand are buying real estate even if they are not getting incredible returns on investment because they are happy with the growth play. Because of the renewed interest from investors, first home buyers have to run a tough race against them. There are actually more investors than first home buyers and there are lots of parents trying to help their children. It is quite rare to find first home buyers investing on their own because the new demographic includes individuals in the 20’s and 30’s purchasing homes together with the parents.
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