First Home Buyers Drop Off In July
The end of generous first home buyer schemes in four states and territories has made an immediate impact on those looking to enter the residential real estate market, says leading mortgage broker Loan Market.
Loan Market Corporate Spokesman Paul Smith said the company’s nationwide data for July, 2012, showed a six per cent fall in enquiries from first home buyers compared to the previous month.
He said enquiries from those looking to upgrade their properties had risen six per cent over the same period.
“It’s no surprise that this drop off in first home buyer activity has coincided with a number of incentive schemes for this segment of the market being wound up by some state and territory governments at the end of the 2011-12 financial year,” Mr Smith said.
“But although we have seen a modest drop off in enquiries from first time buyers, there has been an increase in people looking to upgrade in the current market.
“This is no doubt a reaction to the Reserve Bank of Australia (RBA) lowering official interest rates in May and June this year to bring the cash rate down to 3.5 per cent.”
Mr Smith said the states and territories which ended first home buyer incentive schemes included Victoria, South Australia, New South Wales and the Australian Capital Territory.
But he said the federal government’s $7,000 first home buyers’ grant, which has been in place for more than a decade, continues to be offered nationwide.
Mr Smith said the Queensland government’s decision to reinstate its transfer duty home concession scheme from July 1 also helped attract more upgraders.
“Owner occupier property purchasers or upgraders in July accounted for 50 per cent of Loan Market’s total enquiries nationwide, compared to 44 per cent in June,” he said.
“First home buyers made up 29 per cent of enquiries – down from 35 per cent in June. Investors accounted for eight per cent of enquiries followed by refinancers on six per cent and business loan enquiries on three per cent.”
Mr Smith said a mortgage broker was best placed to advise customers on the range of government incentives and taxes applying to residential property.