First timers return to the market and trend set to continue


In encouraging signs for the housing market, first home owners are returning and according to the Mortgage and Finance Association of Australia (MFAA), it is a trend that will continue over the coming 12 months as housing prices continue to cool.

According to the latest Housing Finance statistics released today by the Australian Bureau of Statistics, first time buyers securing loans (as percentage of total owner occupied housing finance commitments) increased from 19.5 per cent to 23.6 per cent.

“This is the highest percentage of first time buyers seen in the market since January 2002,” said Phil Naylor, CEO of the MFAA.

“We know from our recent MFAA/ Bankwest Home Finance Index that policy initiatives employed by the Government are enticing first time buyers to return to the market.

“In fact, 40 per cent (38.8) of first time buyers told us that the Government is doing enough to support them in their quest for home ownership, when last April, only 14 per cent of first time buyers indicated that they were satisfied with Government initiatives in the housing sector,” said Mr Naylor.

“The introduction of First Home Saver Accounts and the October increase in the First Home Owners Grant, coupled with the drop in interest rates since September, have contributed to the increase in the proportion of borrowers who are first time buyers.

“Based on our research, we expect that the lift in first time buyers revealed in today’s ABS statistics will continue over the next 12 months.

“There is a prevailing belief amongst first time buyers that there will be further drops in property prices, with 43.3 per cent of first time buyers expecting further falls,” said Mr Naylor.

“It is likely that people are holding out until they think the property market has hit the bottom of its price cycle before they make the move to buy.

“First time buyers are vital to the health of the housing market, so the continuation of incentives to encourage them should be carefully considered.”

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