The number of first home buyers turning to their parents or other family members to guarantee their home loan is on the rise, a new survey has revealed, as increasing house prices continue to lock them out of the market.
According to NAB
, the proportion of first home buyers signing up for loans with the bank who have the backing of a family member has lifted to 6.7% from 4.8% in 2010, Fairfax reports
NAB's executive general manager for consumer lending, Angus Gilfillan, told Fairfax
that increasing price pressure and vigorous competition from investors has led to a rise in guarantor home loans for first home buyers.
“It's getting a lot tougher for first home buyers to enter the market. The rise in house prices has been pretty well-documented, particularly in Melbourne and Sydney, where prices have increased by circa 50 per cent since 2008,” he said.
“All of this means that first home buyers need a larger deposit and we're seeing that first home buyers are, effectively, being crowded out of the market.”
The proportion of first home buyers in the home loan market lifted from a ten-year low of 13.6% in January to 13.7% in February, according to the latest housing finance figures released by the Australian Bureau of Statistics. However, first home buyer loans remain well below the long-term average of 19.8%.