More stimulus needed for first time buyers


First home owner grants are only moderately helping the housing market, according to a mortgage broker network.

Managing director of 1300HomeLoan, John Kolenda, recently said that while changes to the first home owners grant have stimulated some activity in new dwelling finance, the majority are not moving back into the market.

This is despite the low interest rates currently being experienced.

"They make up 18.7 per cent of the market compared to the peak of 31.4 per cent in May 2009, when there was a combination of near record-low interest rates and boosted Federal government incentives for first time buyers,” Mr Kolenda said.

"While some sectors of the home finance market are on the improve, we're a long way from being out of the woods and it's going to take even more stimulus and more rate cuts to change that sentiment.”

RP Data's Graham Mirabito recently said more stimulus is needed for new buyers, and expects grants to be seen over 2013.

“It really is not a case of if, but when. We know they will need to inject further buyer incentives down the track in order to keep the housing market alive. What we don’t know is what those stimulus packages will look like," Mr Mirabito said.

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