First home buyers are throwing themselves into the property market in numbers not seen since 2009.
The number of owner-occupier first home buyer loan commitments reached its highest point in ten years in January, with newcomers taking out 9,945 loans (seasonally adjusted), according to ABS data.
That’s a 3.2% rise on the previous month and a 20% increase on January 2019 (7921 loans).
A recent upwards trend in the home loan market was also reported in figures released by The Australian Prudential Regulation Authority (APRA).
The APRA data showed a 12.4% increase in the value of new housing loans settled by authorised deposit-taking institutions (aka lenders) in the December 2019 quarter.
Two things, mainly.
The first is the federal government’s First Home Loan Deposit Scheme.
The scheme, which started on January 1, can allow first home buyers to purchase a property with a deposit of 5% without having to pay Lenders Mortgage Insurance (LMI).
As of late February, it was reported that the majority of the 5,000 places available through 25 non-major lenders for this current financial year were still available to be reserved by potential first home buyers. So if you’d like to find out more get in touch!
The other main contributing factor to the growth spurt in first home buyer numbers is low rates.
Earlier this month the Reserve Bank of Australia (RBA) cut the official cash rate by 25 basis points to a new record low of 0.50%.
This came after three cash rate cuts in 2019, with the latest as recent as October.
And interestingly, RBA Governor Philip Lowe has hinted more rate cuts could be on the way in coming months, saying the RBA will continue to closely assess the implications of the coronavirus
For those thinking of entering the property market for the first time there’s a lot of recent changes to consider – including the record-low RBA cash rate and the federal government’s First Home Loan Deposit Scheme.
So if you’re thinking about purchasing your first home soon, get in touch today, we’d love to help you through the process.
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