Increased grant encourages first home buyers

Banks rather than niche lenders may be the beneficiary of the stimulus to home loan demand from the increase in the first home owners grant from the Australian government. New home finance commitments increased 1.3 per cent in November 2008 over October in the level of demand for new loans for owner-occupation. Banks reported a rise in demand of 2.3 per cent over the month while non-bank lenders reported a decline of 8.3 per cent, reversing a rare rise in market share for the non-bank sector indicated in the October data. Loans to first home buyers comprised 25.6 per cent of new loans in November, up from 19.5 per cent in October and a low of 16 per cent in the first quarter of 2008.

Source: The Sheet