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Where are all the First Home Buyers???

  • Amanda Varidel
  • Aug 18, 2014
  • 2 min read

With fixed rates having reached an historic low, with nine lenders dropping their five-year term loan to 4.99% and lower, provides a great opportunity for potential first home buyers to get into the property market. So why aren’t first home buyers jumping in?

Surprisingly, first home buyers made up just 12% of all loans financed last financial year. This is almost half the proportion of first-home buyers in the market before the First Home Owners Grant (FHOG) was introduced in July 2000. Back then, the proportion of loans financed generally around 25%. At the current rate, the proportion of first home buyers is expected to drop to less than 9%.

This trend is especially surprising given both the low Reserve Bank cash rate and recently lowered fixed-rate home loans, as pairing these could make for an even more secure foundation for first home buyers.

Firstly, first-time buyers are more cautionary than usual. While the cash rate is low now, economists are predicting a change in the future and this is in the back of their minds and secondly, house prices are expensive and this is an obstacle. Whilst we say this, prices in many regional areas across Queensland have seen prices come down.

But there’s light at the end of the first home buyer tunnel: those looking to enter the property market can take advantage of low rates and consider options with a low deposit. There are a few lenders that we work with that require very minimal deposits.

Borrowers may need to weigh up their options before getting into the market. For instance, those who are playing the ‘waiting game’ with property prices may be surprised to find that locking in a fixed rate in the current market might save them heaps in the long run.

It is so crucial that borrowers actually have the financial means to accommodate a loan. Saving as much as possible on a home loan is great, provided they have the resources to see the loan to fruition.

So while the current market has some first home buyers running for cover, with the right advice and guidance, those looking to enter the property market for the first time can see how lucrative the current conditions can be.

We are happy to provide all the right advice you need to make the very best decision possible.

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Stu Varidel AR 324007 and Your Choice Financial Planning Pty Ltd ABN 80124246877 trading as Heart Financial Advisers CAR 323623 are authorised representatives of Sentry Financial Services Pty Ltd ABN 30 113 531 034 & AFSL 286786.

Warning The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your Adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither Heart Financial Advisers and Heart Mortgage Services nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.

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