The number of home loans surged in September after two straight months of decline, as first home buyers flocked to the market ahead of the October 1 roll back of the first home owner grant.

But the reprieve may be temporary, with economists expecting a sharp pull-back in the market in October and November as potential home owners grapple with rising interest rates.

Australian housing finance commitments for owner-occupied housing rose 5.1 per cent in September, seasonally adjusted, to 65,505 the Australian Bureau of Statistics (ABS) said on Monday.

This compares to a 1.9 per cent fall in August and 1.6 per cent fall in July. The September figure also beat market expectations of a three per cent rise.

Total housing finance by value was also strong, rising by 4.8 per cent in September, seasonally adjusted, to $23.847 billion - it’s highest level since June 2007 when it reached a record $24.531 billion.
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First homebuyers are losing interest in the loan market as the federal government reduces financial assistance for their housing purchase.

The increased first homeowners grant was pared back on October 1 to $10,500 from $14,000 for established homes and to $14,000 from $21,000 for new homes from October 1.

From January 1, 2010 assistance reverts to its original level of $7,000.

“Business from first homebuyers has dropped off dramatically,” Loan Market Group’s Dean Rushton said on Tuesday.
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The number of Victorians buying their first home with government grant assistance has topped the 5,000 mark for a month for only the second time in the state’s history.

Each of the last three months had been the highest for first home buyers, with June and July both topping the 5,000 mark.

The Victorian government claimed credit for the figures on Saturday for its role in providing state and federal grants.

First home buyers have been able to receive $14,000 if they buy an existing home and $21,000 if they build a new one under government stimulus measures.
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Fears NSW first home buyers could miss out on federal government grants have been allayed, with state government legislation to administer the payments being passed on Wednesday.

NSW Treasurer Eric Roozendaal had warned that federal payments of up to $14,000 for first home buyers purchasing a new property and $7,000 for an existing home were at risk because the state opposition planned to vote against the enabling legislation in the lower house.

The opposition said it voted against the bill because other sections of the legislation contained a host of unpopular measures, including a duty on the transfer of businesses.
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It is premature to end the federal government’s first home buyers grants at the end of the year when economists predict tougher times in 2010, the Real Estate Institute of NSW says.

The federal government has extended the grants until the end of the year but they will be reduced from October 1.

“It is disappointing that we have not seen a commitment to continue the enhanced initiatives for a full financial year given that government and economists are predicting even more difficult economic times in 2010,” institute president Steve Martin said in a statement.

“The sooner the property sector recovers, the sooner the rest of Australia will start to enjoy better economic times.
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Australasia’s largest real estate group, Ray White, will next month host a second series of trans-Tasman ‘Auction Spectacular’ events to take advantage of the revamped First Home Buyer’s Grant.

Ray White CEO Business Growth, Mark McLeod, said the Auction Spectacular would be held from June 20-30 at locations throughout Australia and New Zealand.

Mr McLeod said the last series of super auction events in March this year helped the Ray White group achieve record monthly sales of $2.37 billion.

More than 700 properties were listed for sale in the Auction Spectacular, with auction events taking place in 25 different locations during the second half of March.
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First home buyers now comprise a record proportion of the residential housing market after responding to low interest rates and the government’s revamped assistance package, economists say.

First home buyers made up 27.5 per cent of all home loans in March, a record since the Australian Bureau of Statistics (ABS) began the data series in 1991, and compared with 26.5 per cent of the total market in February.

The ABS data also showed that the housing market has recovered to its February 2008 levels, when interest rates were still being raised by the Reserve Bank of Australia (RBA) before a series of monthly cuts since September to a 49-year low last month.

The number of home loans for owner-occupied housing jumped to a 13-month high of 59,793 in March.
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Victorians will get up to $22,500 towards their first home as the state’s bonus scheme is extended, with new sweeteners for those who buy new or build.

But there’ll be a marginal drop in the state bonus offered to people who buy existing dwellings.

As the Brumby government tries to stimulate building activity amid the global recession, Victoria’s first home bonus for newly constructed properties will more than double.

From July 1, first time buyers purchasing new properties in metropolitan Melbourne will receive $11,000, up from the current $5,000.
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The first home buyers bonus is set to more than double to $11,000 for Victorians buying a new home, but buyers of existing homes will lose out.

From July 1 the bonus for existing homes will decease by $1,000 to $2,000.

For newly constructed homes the bonus will rise from $5,000 to $11,000, while regional new home buyers will receive an added $4,500, up from $3,000.

The bonus is in addition to the $7,000 federal government first home buyers grant.
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Banks and other home finance providers are struggling to cope with the rush of people seeking to take up the boosted First Home Buyers Grant, according to one Australian mortgage broker.

Loan Market Group Executive Director John Kolenda said the heightened activity caused by the Federal Government’s decision last October to raise the grant for established dwellings to $14,000 and to $21,000 for new homes had taken lenders by surprise.

Mr Kolenda said there were delays in getting loans approved due to the dramatic rise in the number of first home buyers. He said many people could miss out on the grant if the Government sticks to a June 30 expiry date for the scheme.
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Mortgage broker Loan Market Group has warned the Australian residential property sector faces a severe downturn unless the Federal Government extends the boosted First Home Buyers Grant.

Loan Market Group Executive Director John Kolenda said the decision last October to increase the grant had resulted in the real estate market being one of the few parts of the national economy that was still active.

Mr Kolenda said doubling the First Home Buyers Grant to $14,000 for established homes and $21,000 for newly built properties had provided a solid foundation for the property market during the global economic crisis.
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The peak body for the mortgage and finance industry has urged the Government to extend the First Home Owners Boost beyond June, saying that the added incentive was attracting additional first time buyers to the market, buoying the housing sector.

Phil Naylor, CEO of the Mortgage and Finance Association of Australia (MFAA) said: “First time buyers are an incredibly important element of the housing industry and any comeback in the housing industry is reliant on new entrants and people purchasing their first home.
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Big interest rate cuts and the boost in first home buyer grants will take at least another year to spark a recovery in home building, the nation’s peak residential construction group says.

The Housing Industry Association (HIA) predicts that housing starts will decline this financial year before growing again in 2009/10 and 2010/11.

HIA chief economist Harley Dale said rate cuts since September and the increase in the first home buyers’ grant, as part of the federal government’s earlier $10.4 billion economic stimulus package, would start helping the home building sector during the next financial year.
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A surge in the number of first home buyers highlights the need to extend generous Federal Government grants to new home owners.

Loan Market Group Executive Director John Kolenda said the latest housing finance data for December, 2008, underlined the success of the Government boosting the First Home Buyers Grant to $14,000 and $21,000 for newly constructed homes.

Mr Kolenda said the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments rose from 23.6 per cent in November 2008 to 25.4 per cent in December 2008, the highest proportion since December 2001.
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First-time home buyers are flooding into the housing market to take advantage of the federal government’s increased grants and low mortgage rates, new data suggests.

First-time home buyers made up 25.4 per cent of home loans granted in December, the highest proportion since December 2001 - the height of the last major housing boom.

As part of of last year’s $10.4 billion economic stimulus package, the government doubled the first home buyers grant to $14,000 for the purchase of existing homes, and to $21,000 for newly built properties, until June.
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