Locally, the tone has been set for further official interest rate reductions with the release of Reserve Bank notes from last week’s meeting. We now have the one year fixed rate down to 4.23% which signals expectations of further cuts of 0.75%-1.0% over the next 12 months. If 2-5 year fixed rates also go well below 5.0% you can interpret that as a sign the economic slow down won’t be short and sharp but more protracted and unfortunately, painful.

 

China however, has stepped up to the plate and announced a major stimulus package aimed mainly at large infrastructure projects although you can bet it will be supported by other measures designed to boost consumption and thus keep the overall growth rate closer to 10% than 8%. Other Asian economies are mobilising in a similar vein while the market is expecting news of an Obama stimulus package in the States which will ultimately only add to the mind boggling deficit that is starting to resemble dark matter and exert its own gravitational force.

*Source Think Quick from Think Tank's Jan Johnson 10/11/2008.

On the home front - the First Home Owners Grant has increased to $14,000 for established homes and $21,000 for construction. This has injected life into the property sectors with LoanCom Australia writers again being rushed off their feet with applications and approvals. This should begin to filter throughout the property section over the coming months.

Some confusion has reigned on the increased First Home Owners Grant. The increase applies to those offers that were signed and completed on or after 14th October 2008. The increase will expire on or before 30th June 2009 - depending on funding. This means it has the potential to expire sooner than the 30 June deadline if the funds dry up.

If you would like any additional information on purchasing your first home or how you can assist your son or daughter into getting into their first home contact your friendly mortgage broker.

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Making an offer (Part 3)

Building Inspections - all buyers should consider hiring an independent expect such as a building surveyor, registered builder, structural surveyor or architect to provide a written report on the structual soundness of a property. You can include as a condition on the offer and acceptance, a satisfactory report about the structural soundness of a property and what the consequences will be if it is not or there are problems. Should you decide to include a special condition about the satisfactory building inspection report on the offer and acceptance, then specify that the inspection should comply with Australian Standards 4349.1 of 1995.

Timber pests - if you intend to buy an established house, you should consider obtaining a timber pest inspection report on the property from a timber pest or building inspection compnay that inspects and reports in accordance with Australian Standards AS4349.3-1998.

If choosing to obtain a timber pest inspection report, a special condition on the offer and acceptance should be inserted. The special condition should state that if activity by timber pests is sufficient to cause, or have caused, damage, then the contract of sale be cancelled or the seller pays for any repairs resulting from any damage caused by the timber pests. For more information see the fact sheet on REBA's website - www.reba.wa.gov.au.

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As a first home buyer did you know you could apply for assistance to help pay for some of the fees and charges and other incidental expenses. You may be eligible for the REBA Home Buyers Assistance Fund. The scheme is funded from the interest paid on real estate agents' trust accounts and can provide grants of up to $2000 towards some of the incidental expenses associated with buying your first home.

For more information you can contact Loancom Australia. Amanda, Greg, Brad, John and Ric are only too happy to assist with your finance needs. For more information please contact Loancom on 9386 9211.