First home buyers make slow return
By
Kevin Eddy
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5/08/2010 6:00:00 AM
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The latest mortgage figures from AFG have revealed that first home buyers are returning to the housing market.
The firm's general manager for sales and operations. Mark Hewitt, told Broker News he believed this is due to natural demand reasserting itself following the First Home Owners Boost.
"We always suspected that the boost had pulled forward demand amongst first home buyers," said Hewitt. "July's figures suggest that natural demand at this level is starting to reassert itself - probably assisted by the fact that price growth has slowed a little."
Australian Bureau of Statistics figures released yesterday confirm that house price growth has slowed, with growth for the June quarter at 3.1% compared to 4.2% in the March quarter. The increase in first home buyer activity and a slowdown at the higher end of the market also meant the average loan size fell by $7,000 to $370,000.
Refinancers formed the largest single group of borrowers, at 39.4% of the market. Hewitt commented that this mostly consisted of movement between the major banks, rather than to non-bank lenders. Investors were down slightly against last month, although not considerably so: Hewitt suggested that this might be down to greater sensitivities about a potential change in government following the federal election.
In terms of activity, Hewitt commented that the first two weeks of July were slow, but picked up towards the end of the month. Even so, the total number of new mortgages was down 15% compared to July 2009. Activity in the first few days of August has been much much stronger - which bodes well for the coming spring.
"It won't be a bumper spring, but it should be quite strong," added Hewitt. "The likelihood of RBA interest rates remaining at their current level will boost confidence - even though an independent increase by the banks after the election is a more-or-less foregone conclusion. I think we'll see a good spring."
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