First home buyers trickling back into the market
Low interest rates and new initiatives spark rebound.
A new report released by Mortgage Choice has found first home buyers accounted for 14% of all loans written through the company in April. The figure is up from 12.2% in January.
“This growth in first home buyer demand can be attributed to a number of factors, including low interest, stagnating property price growth and enhanced initiatives,” Mortgage Choice CEO John Flavell said.
Flavell pointed to recent CoreLogic statistics, which showed property price growth halting in April. Median dwelling values across capital cities rose just 0.1% for the month.
“Furthermore, interest rates remain at historical lows, which has helped keep the cost of borrowing at affordable levels,” Flavell said.
Demand was also aided by changes to first home buyer incentives during the first quarter of the year. In Western Australia, there was a temporary $5,000 boost to the state’s First Home Owners Grant. Victoria also increased the size of its First Home Owners Grant and made changes to stamp duty concessions.
In spite of the rise, Flavell said more needed to be done to help first home buyers. He argued that the Federal Government’s mooted Super Saver accounts were unlikely to have a significant impact.
“Indeed, there is nothing to suggest that this new scheme will deliver a different result to the spectacularly unsuccessful First Home Saver Account initiative that was launched by the Rudd Government in 2008 and withdrawn from the market in 2014,” he said.