First property buying activity slumps
After a strong start to the year first home buyer activity is beginning to wane, according to new data.
Loan Market Group's corporate spokesman Paul Smith said the company's enquiries from first home buyers had dropped off 20 per cent nationwide during March.
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He said the fall was greater in New South Wales and Victoria with activity in those states down 25 per cent and 23 per cent respectively in March compared to February.
Only Queensland bucked the trend with a three per cent rise.
Mr Smith said the RBA leaving rates on hold and the major banks lifting their variable rates in February had deterred first time buyers.
"There had been a revival in the first home buyer sector late last year and early this year on the back of the RBA twice cutting the cash rate in November and December, 2011," he said.
"But the combination of official rates staying on hold and the banks raising rates independently of the RBA has caused some confusion in the marketplace as some buyers are unsure exactly where home loan interest rates are headed."
Mr Smith said a lowering of the current cash rate of 4.25 per cent by the RBA at its next monthly meeting on Tuesday would be welcomed by many sectors of the economy.
He said a recent Loan Market consumer survey found more than 70 per cent of respondents were expecting the RBA to cut the official rate in March and that sentiment towards a rate cut has changed very little in the past three weeks.
"Although some progress has been made in the European debt crisis, and many economic indicators are within target, there remain stalled sectors that would benefit from an April rate cut by the RBA," Mr Smith said.
