First homebuyers have overtaken investors as the major force in the housing market, a new report has shown.
According to the latest data from mortgage broker Australian Finance Group (AFG), the number of home loans taken out by first homebuyers surged to a record 25.8% of all the mortgages sold in January. The proportion of first-time buyers is now more than double the 11.6% recorded six months ago in July 2008 said AFG.
First homebuyer activity was greatest in NSW (30.5%), followed by WA (26.7%), Victoria (25.3%) and Queensland (24.7%).
The significant increase in first homebuyers in the market started in December, following the government's move to boost the First Home Owner Grant.
"The surge is now in its third month and shows no signs of stopping," said Mark Hewitt, general manager of sales and operations, AFG. "Younger people with reasonably secure jobs have become an important force in the property market during the past few months. For many of them, the opportunities are unprecedented - generous government hand-outs, soft prices and interest rates that are now at a 30-year low."
Investors, however, appear to be still spooked by the continuing negative economic news. The proportion of home loans taken out for investment purposes fell to 26.5% in January from 28% in December. The AFG data also showed refinancing falling to a 12-month low of 34.7% suggesting that more people are hunkering down with their current lender as interest rates fall.
While the overall mortgage sales in January dropped by 13.66% to $1.9bn compared to December, AFG said "the rate cut on Tuesday and the $42bn government stimulus package is expected to stimulate activity in February and March."
