Archive for the ‘First Home Buyers’ Category

Ongoing Decline of First Home Buyers in Property Market

Thursday, January 13th, 2011

Higher interest rates and tighter lending practices are stopping first home buyers from taking the step to engage with the property market.

According to new research by Loan Market group, enquiries from first home buyers fell 15 per cent in the last six months of 2010. Loan Market chief operating officer Dean Rushton said monthly enquiries from first home buyers had dropped to 30 per cent of all enquiries received in December 2010, compared to 45 per cent in June of that same year.

“This is a far cry from 2009 when first time buyers dominated the home finance market due to boosted government incentives and interest rates at near 50 year lows. But a combination of factors, such as four interest rate rises last year by the Reserve Bank of Australia and the prospect of more this year, is squeezing these people out of the market” Mr Rushton said.  

He went on to state that government incentives such as the $1.2 billion First Home Saver Accounts (FHSA) scheme had done little to encourage more first time buyers into the market. The scheme aimed to assist more than 700,000 people within the first four years but it has attracted nowhere near the amount of interest anticipated.

source: www.theadviser.com.au

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Breaking News! – Rent Considered Genuine Savings

Thursday, December 23rd, 2010

St George will now accept rental payments as evidence of genuine savings.

In a move that will help first home buyers all over the nation, St George has announced it will accept rent as a form of savings for a home deposit if there is evidence of a minimum of 12 months continuous satisfactory rental history and the property is leased through a property manager.

“This is a significant breakthrough for first home buyers and a move which could be a major boost to the home finance industry,” Loan Market chief operating officer Dean Rushton said.

“Higher interest rates, tougher lending conditions and the end of the boosted federal government grant at the end of last year have driven first time buyers out of the market.

“Another major restriction for them has been the difficulty in saving a deposit for a home loan, particularly in this economic climate with people having to cope with massive cost of living increases including rental payments.”

Up till now, all Australian lenders have required a percentage of the purchase price – normally five per cent minimum – to be saved for all loans.

“But if rental payments were taken into consideration as a factor in assessing genuine savings that would enable many people to pursue the dream of home ownership,” Mr Rushton said.

“St George has now moved to accept rental history as a form of genuine savings and they should be applauded for this decision as it will enable a lot more people to realise the great Australian dream of home ownership.”

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