First home buyers claim their biggest slice of the property pie in six years

First home buyers claim their biggest slice of the property pie in six years

First home buyers have claimed their biggest share of new housing loans in more than six years, according to the latest ABS Housing Finance figures.

Today’s data shows first home buyers made up 18.3 per cent of owner-occupier loans taken out in November, up 0.2 per cent from last month. This is the highest share for first home buyers since October 2012.

Meanwhile, the value of investor commitments dropped 4.5 per cent month-on-month and 23.4 per cent year-on-year, in seasonally adjusted terms.

Overall, the value of home lending fell 2.5 per cent in November, after an unexpected uptick in October. Owner-occupied housing also fell in value by 1.4 per cent, according to the seasonally adjusted figures.

RateCity.com.au data shows some banks are competing fiercely for first home buyers, putting  a range of sweeteners on the table from grants and cash back offers, to fee waivers and rebates.

Sally Tindall, research director at RateCity.com.au, said first home buyers were getting a stronger foothold in a slowing property market.

“Many first home buyers have been biding their time, squirrelling away savings and waiting for the opportunity to strike,” she said.

“There’s finally space in the market for them to find their feet without having to go head-to-head with experienced investors.

“While the banks still have serviceability requirements on a tight leash, they’re welcoming first home buyers in the door, provided they’ve got a decent deposit and have a proven track record of frugal spending.”

istock_79305201_small5

Did you find this helpful? Why not share this news?

Advertisement

RateCity

Money Health Newsletter

Subscribe for news, tips and expert opinions to help you make smarter financial decisions

By signing up, you agree to the ratecity.com.au Privacy & Cookies Policy and Terms of Use, Disclaimer & Privacy Policy

Advertisement

Learn more about home loans

How common are low-deposit home loans?

Low-deposit home loans aren’t as common as they once were, because they’re regarded as relatively risky and the banking regulator (APRA) is trying to reduce risk from the mortgage market.

However, if you do your research, you’ll find there is still a fairly wide selection of banks, credit unions and non-bank lenders that offers low-deposit home loans.

How often is your data updated?

We work closely with lenders to get updates as quick as possible, with updates made the same day wherever possible.

Does Real Time Ratings' work for people who already have a home loan?

Yes. If you already have a mortgage you can use Real Time RatingsTM to compare your loan against the rest of the market. And if your rate changes, you can come back and check whether your loan is still competitive. If it isn’t, you’ll get the ammunition you need to negotiate a rate cut with your lender, or the resources to help you switch to a better lender.

Mortgage Balance

The amount you currently owe your mortgage lender. If you are not sure, enter your best estimate.

How can I get a home loan with no deposit?

Following the Global Financial Crisis, no-deposit loans, as they once used to be known, have largely been removed from the market. Now, if you wish to enter the market with no deposit, you will require a property of your own to secure a loan against or the assistance of a guarantor.

What happens to your mortgage when you die?

There is no hard and fast answer to what will happen to your mortgage when you die as it is largely dependent on what you have set out in your mortgage agreement, your will (if you have one), other assets you may have and if you have insurance. If you have co-signed the mortgage with another person that person will become responsible for the remaining debt when you die.

If the mortgage is in your name only the house will be sold by the bank to cover the remaining debt and your nominated air will receive the remaining sum if there is a difference. If there is a turn in the market and the sale of your house won’t cover the remaining debt the case may go to court and the difference may have to be covered by the sale of other assets.  

If you have a life insurance policy your family may be able to use some of the lump sum payment from this to pay down the remaining mortgage debt. Alternatively, your lender may provide some form of mortgage protection that could assist your family in making repayments following your passing.

What is a specialist lender?

Specialist lenders, also known as non-conforming lenders, are lenders that offer mortgages to ‘non-vanilla’ borrowers who struggle to get finance at mainstream banks.

That includes people with bad credit, as well as borrowers who are self-employed, in casual employment or are new to Australia.

Specialist lenders take a much more flexible approach to assessing mortgage applications than mainstream banks.

What is breach of contract?

A failure to follow all or part of a contract or breaking the conditions of a contract without any legal excuse. A breach of contract can be material, minor, actual or anticipatory, depending on the severity of the breaches and their material impact.

Remaining loan term

The length of time it will take to pay off your current home loan, based on the currently-entered mortgage balance, monthly repayment and interest rate.

How does a redraw facility work?

A redraw facility attached to your loan allows you to borrow back any additional repayments that you have already paid on your loan. This can be a beneficial feature because, by paying down the principal with additional repayments, you will be charged less interest. However you will still be able to access the extra money when needed.

How is the flexibility score calculated?

Points are awarded for different features. More important features get more points. The points are then added up and indexed into a score from 0 to 5.

Mortgage Calculator, Repayment Type

Will you pay off the amount you borrowed + interest or just the interest for a period?

Mortgage Calculator, Deposit

The proportion you have already saved to go towards your home. 

Mortgage Calculator, Repayments

The money you pay back to your lender at regular intervals.