RateCity’s first home buyer report released in October 2010 showed a reduction in the number of first home buyers, with around 15 percent of mortgages taken up by first home buyers in August, compared to an average of 26 percent last year.
According to the report there were a number of contributing factors such as:
- An increase in interest rates. The report showed that it is now 18 points harder for first home buyers nationally in August this year to August 2009, according to the RateCity First Home Buyer Index, with a base of 100 points in August 2009.
- There was also an increase in the national average mortgage repayments of 21.86 percent for first home buyers, bringing it up to $1,962 per month.
- The national average first home buyer loan size increased by 4.58 percent in August compared to August 2009. The average loan size is now $283,200.
- House prices grew on average by 7.39 percent, increasing the national average to $494,000. Overall Melbourne showed the highest increase at 12%, but Sydney’s average price of $590,000 was the highest.
- The First Home Owner’s Boost ended in December 2009 and $50 million less per month was being paid to first home buyers through First Home Owner’s Grant compared to August 2009.
- Based on the national average figures, first home buyers are now paying 34 percent of their income towards their mortgage repayments which is an increase of 13 percent.
If you are a first home buyer wishing to enter the property market, don’t be disheartened as you may be able to still enter the market and save at the same time. Just by shopping around and comparing home loans online could mean a big difference to your repayments. For low interest home loans, take a look at the table to the right.