First home buyers back in market

08/09/2010

Stabilisation in house prices, combined with greater competition in mortgage lending, has given first-home buyers the incentive to get back into the property market. Mortgage aggregator AFG reported yesterday that sales to first-home buyers made up 11.7 per cent of the loans written by its brokers in August, an increase from 11.1 per cent in July and 9.5 per cent in June. Competition between lenders has been evident in the increasing number of them offering mortgages with loan to valuation ratios above 90 and 95 per cent.

High LVRs are popular with first-home buyers, who often struggle with deposit requirements. AFG executive director Kevin Matthews said in a statement that government grants to first-home buyers had brought forward buying decisions in 2009. He said: “The impact of those grants seems to have washed through the system.” A year ago first-home buyers accounted for 20.9 per cent of mortgage sales.

Source: Banking Day