Stabilising property prices are encouraging first home buyers into the market, new data from mortgage aggregation business AFG has found.
According to AFG’s latest monthly Mortgage Index, for the second consecutive month, sales to first home buyers also increased – hitting 11.7 per cent from 9.5 per cent in July.
AFG executive director Kevin Matthews said greater competition between lenders on price and policy, and especially the increasing of loan-to-value ratios, is supporting the entry level home buyers.
“We now have two months of data which show that first home buyers are coming back. The impact of government grants, which had the effect of bringing forward first home buyer demand, seems to have washed through the system.
"With property prices in many areas having stabilised, and some lenders prepared to lend up to 95 per cent of a property’s value, property is becoming more accessible to first home buyers,” Mr Matthews said.
First home buyer activity was particularly robust in NSW, where it comprised 15.5 per cent of all new mortgages compared to 11.7 per cent in June.
First home buyers comprised 12.9 per cent of all mortgages in WA, 11.7 per cent in Victoria, 9 per cent in Queensland and 6.7 per cent in South Australia.