Rate cuts encourage first home buyers into market

Surveys suggest that buyers, including first-home buyers, have been encouraged by lower interest rates and a fall in prices, and are getting into the market.

With the prospect that interest rates will continue to fall in the coming year, economists forecast a pick-up in home-buying activity and a recovery in prices.

First-home buyer participation was weak in 2010 and early last year, making up about 15 per cent of dwellings financed. But by the end of last year, their participation level had jumped to 21 per cent and has remained near that level this year.

According to Genworth Financial's latest Homebuyer Confidence Index, forty-nine per cent say it is a good time to buy property, up from 39 per cent in March.

Source: The Age