Research is continuing to show a slump in first home buyer activity but there is still good reason for aspiring fist timers to get into the market now.
First home buyer numbers accounted for just 15.6 per cent of all owner-occupier home loans written in November, Australian Bureau of Statistics data showed yesterday.
This compares to as much as 28 per cent recorded in April 2009, during the beefed-up first home owner grant/record low cash rate boom.
According to mortgage broking group Loan Market, enquiries from first home buyers fell 15 per cent in the last six months of 2010.
Loan Market CEO Dean Rushton said monthly enquiries from first home buyers had dropped to 30 per cent of all enquiries received in December, compared to 45 per cent in June 2009.
In addition to the withdrawal of the government’s super-sized housing grants, rising interest rates in 2010 have pushed many an aspiring property buyer to the sidelines of the property market.
But while buying conditions may not be as rosy as they were in early 2010 and late 2009, there are several reasons first time buyers shouldn’t be discouraged.
“With housing price growth having slowed alongside our continued strong population growth and healthy employment situation, there are plenty of opportunities out there for buyers who do their research, are confident of their finances and can withstand possible future interest rates rises,” commented Mortgage Choice spokesperson Kristy Sheppard this week.
Indeed, Ms Sheppard’s words are true, and current market conditions offer first time buyers several unique advantages.
First of all, despite rising interest rates in 2010, expectations are that the cash rate will remain on hold for at least a couple of months. The devastating flooding in Queensland has pushed out expectations of the next rate rise to as late as May.
Secondly, property prices have really slowed down with prices in many markets even seeing a slight correction. With prices tipped to continue a soft run for some months to come, first time buyers can get in at the bottom of the market and enjoy the market renaissance when it arrives.
And lastly, a quieter market gives property buyers a firm upper hand. With less buyer competition first time buyers in the current market will be better placed to negotiate a better deal and sidestep over-inflated prices.
Of course, each and every Australian property market will differ, but for first time buyers who do their research and play their cards right, there’s no reason why now shouldn’t be the right time to crack the market.