Policy initiatives designed to assist new home buyers into the market are beginning to take effect, with 40 per cent (38.8) of first time buyers saying that the Government is doing enough to support them in their quest for home ownership, according to the latest Mortgage and Finance Association of Australia (MFAA)/ Bankwest Home Finance Index.
“Last April, only 14 per cent of first time buyers indicated that they were satisfied with Government initiatives in the housing sector,” said Phil Naylor, CEO of the MFAA.
“The massive increase can, in part, be put down to the introduction of First Home Saver Accounts and the increase in the First Home Owners Grant (FHOG), which came into effect in mid October.
“As we expected, the increase in the FHOG, from $7,000 to $14,000 for an existing home and up to $21,000 for a new home has been welcomed by first time buyers, with 53.8 per cent believing that the increase will help them buy their own home.”
According to the survey, over half of all first time buyers believe that now is a good time to enter the property market.
“The findings of the survey support anecdotal feedback from the housing and real estate industries that they have seen a spike in enquiries from new buyers. The Government’s initiatives, combined with a perceived fall in property prices and dropping interest rates are contributing to a revival in interest from those looking to buy their first home,” said Mr Naylor.
“Based on this survey, we can expect to see larger numbers of new entrants enticed into the market in the next 12 months. 50.5 per cent of potential first time buyers (and 45.8% of all respondents) believe it is a good time to buy.”
Of the first time buyers who agreed that now is a good time to buy:
– 27.8 per cent mentioned the main reason was because they believed house prices to be lower;
– 16.5 per cent mentioned interest rates; and
– 8.2 per cent indicated the first home buyers grant was the main reason to buy now.
Bankwest Head of Mortgages and Savings Paul Vivian said: “The importance of first time buyers to the housing industry should not be underestimated. This group generally makes up about a fifth of potential home buyers and any slowdown or stalling of this section of the market has a significant impact on the housing industry and property values.”
“Despite such high numbers of first time buyers believing it is a good time to buy, they are taking a cautious approach.
“47 per cent of those who had intended to buy their first property in the next year have put their purchase on hold because of the current economic situation,” said Mr Vivian.
“In addition 43.3 per cent of first time buyers who believe it is not a good time to enter the market are expecting a further drop in property prices. There is also a prevailing belief that interest rates will undergo further cuts.”
The twice-yearly MFAA/ Bankwest survey draws on a pool of consumers who are in the market to buy their first home. It is a key study that maps the intentions and sentiment of first time buyers.