First homebuyer activity has taken a significant hit, as one broking business has pleaded for rate cuts.
Loan Market data has revealed a 20% decline in first homebuyer activity for March. The drop was felt most severely in NSW and Victoria, with falls of 25% and 23% respectively. Queensland was the only state to see a rise.
A Loan Market spokesman suggested that the RBA's rate hold and ensuing out-of-cyle moves from lenders had scared off many would-be first-time buyers.
"There had been a revival in the first home buyer sector late last year and early this year on the back of the RBA twice cutting the cash rate in November and December, 2011,but the combination of official rates staying on hold and the banks raising rates independently of the RBA has caused some confusion in the marketplace as some buyers are unsure exactly where home loan interest rates are headed," he said.
In light of the figures, Loan Market called on the Reserve to cut the cash rate when it meets next week.
"The RBA has noted that the banks no longer face the cost of funding pressures that caused them to lift their home loan rates independently of the Central Bank. So if we get a cut in the cash rate on Tuesday consumers will be hoping their lenders follow suit and pass on the reduction in full," the spokesman said.
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