First home owners are doing fine, thank you
The share of new loans to owner-occupiers and with a loan to valuation ratio of more than 90 per cent fell by more than a third over the last year, the Reserve Bank of Australia reported in its half-yearly Financial Stability Review.
Housing loans with an LVR above 90 per cent fell from a peak of 27 per cent in the March 2009 quarter to 17 per cent by the end of last year. The RBA’s source is not clear, but is most likely from bank records. One context for the RBA citing this data is the extent to which the first home owners boost, a lift to the usual Australian government grant to new buyers, encouraged lenders to loosen lending standards to meet demand last year.
The RBA argued, citing “partial credit bureau data” that “the creditworthiness of recent first-home buyers has been broadly similar to earlier cohorts of first-time borrowers.”
Source: Banking Day