First homebuyers are coming back into the market after years on the sidelines and are using smart strategies to get on the property ladder, according to home loan lender, ME.
In July and August 2017, first home buyers taking out a mortgage with ME grew 17 points to 24% of all home loan applications compared to the same period last year.
ME recorded the largest increase in first home buyer applications in Western Australia (up 28 points to 37%), Queensland (up 24 points to 33%) and Victoria (up 15 points to 24%).
ME’s Head of Home Loans, Patrick Nolan said first home buyers are clearly taking advantage of grant and stamp duty changes, and dampening demand from investors.
“APRA regulations curbing the amount of investor and interest-only loans banks can lend have curbed investor activity. As a consequence, owner-occupiers are experiencing less competition from investors, and are benefiting from low lending rates as banks compete over a smaller marketplace.
“Since 1 July 2017, the First Home Owner Grant and stamp duty discounts have been ramped up, providing a helping hand for eligible first home buyers.
“This means eligible first home buyers can assemble a larger deposit, reduce their loan-to-value ratio and potentially cut out mortgage insurance”.
ME’s first home buyer customers borrowed on average $369,000 – an increase of $26,000 or 8% in July and August 2017 compared to same period last year.
Nolan also noted a number of strategies that first home buyers are deploying to get into the market, based on recent ME research with around 1,000 property owners in June 2017:
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