It appears fierce competition in the lower end of the property market has pushed up home loan sizes across the country.
The number of people borrowing more than $500,000 to purchase property rose by an average of 13 per cent nationwide over the past 12 months, mortgage broking group Loan Market said today.
The news confirms concerns that the increased first home owner's grant was pushing up prices in the sub $500,000 market.
“A higher proportion of first home buyer activity during 2009 due to the boosted government first home owner's grant and a more subdued top end market were factors which resulted in pushing people into higher home price and loan brackets,” Loan Market CEO Dean Rushton said.
According to the group, loan sizes increased across all mainland state capitals with Melbourne experiencing the largest rise.
“The Melbourne housing market experienced the biggest shift with a 21 per cent increase in people taking loans of more than $500,000 over the 12 months to July, 2010,” Mr Rushton said.
Unsurprisingly, Sydney was found to have the lowest percentage of loans below $500,000, at just 28 per cent, while Adelaide had the highest number of loans below $500,000, with 66 per cent.