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First home buyers disappearing by the month

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Australian Broker | 17 Oct 2014, 04:00 AM Agree 0
The Australian property market is suffering from a severe lack of first home buyer participation
  • Jon Colley | 17 Oct 2014, 10:43 AM Agree 0
    On the Sunshine Coast we haven't seen any significant price increase in property for some time, however we still have a reduced number of FHB in the market, and while I think the FHOG available today don't really help a new first home get into a property at all, given most lenders will not use these towards deposit funds, other changes to Mortgage Insurance conditions considerably reduce accessibility to first home buyers. I am amazed there is so much talk about increased property prices and investor activity being the cause of this, and no one mentions the inability by the majority of major lenders to fully cap LMI costs onto a 95% loan any more (most FHB require a 7 to 9% deposit now to cover MI costs). This has contributed extensively to create the reduction of first home owners in the market. The current additional hurdles for genuine savings also make it very difficult for first home owners with a sufficient deposit to obtain finance as well, not to mention certain mortgage insurers refusing to lend at all in certain regions. There are plenty of first home owners out there wanting to purchase, and I believe more should be done to assist them into the market rather than creating more difficult hurdles for them to do so. And stop blaming affordability, this issue is apparent nationally, including areas outside Sydney and Melbourne growth areas.
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