First home buyers (FHB) have been the most active segment of the home finance market in 2013 for enquiry, according to aggregator Loan Market, representing 53% of all home loan enquiries from March through to the start of April.
Loan Market spokesperson, Paul Smith, says the pool of prospective first home buyers has been growing for nearly four years and, as economic and buying conditions improve, it’s becoming increasingly likely that brokers will see the return of this important market segment.
However, Smith notes that while enquiring about a home loan is an important first step for FHBs, it doesn't necessarily mean the customer intends to purchase right away.
“Many first home buyer enquiries are from customers who are researching and gathering the facts about purchasing and taking their time to buy at the right time. With interest rates at historic lows and an increasingly foggy rate forecast, there is an underlying sense of urgency that this is the bottom of the interest rate cycle.”
But he says the same urgency on missing out on low interest rates isn’t being seen in the property market, with clearance rates and stock levels signalling improving buying conditions.
“With lots of real estate stock on the market, these buyers are taking the time to wait for their ideal property and the right conditions to buy it in. First home buyers are both educated and patient in this regard.”
“It’s no secret,” he says, “that first home buyers have had their challenges getting into the property market over the past two years. The removal of some state-based tax exemptions and buying grants has made purchasing your first home more difficult than previously.”
Smith also says pre-approval is a popular trend among FHBs because it gives them the time needed to shop around for their ideal property and have the confidence in knowing what they can afford.