Housing outlook weak for first home buyers

Higher interest rates and the withdrawal of boosted government stimulus packages are taking a toll on home buyers.

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According to ABS figures released today, first home buyer loans fell 52.9 per cent in the three months to September.

In addition, the number of loans for the purchase of new dwellings also fell, dropping by 3.2 per cent in September 2010.

HIA senior economist Andrew Harvey said the removal of the first home owners boost was stopping many borrowers from buying property.

“Lending for new homes continues to be below trend and highlights the problem the nation is now facing in terms of a two-speed economy. It’s great that the mining sector is about to take off like an Aston Martin DB9, but unfortunately we have the residential building industry stuck in neutral,” Mr Harvey said.

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