First home buyer activity has fallen in September, despite it being the last month before the first home owners grant boost was reduced.
According to AFG’s Mortgage Index, loans to first home buyers fell from 20.9 per cent in August to 20.0 per cent in September.
AFG general manager of sales and operations Mark Hewitt said there was a lot of anticipation about a surge of first home buying activity in September – but this never materialised.
“Our results suggest that most of the demand had already been pulled forward as a result of speculation prior to the federal budget that the increased grants would not continue,” Mr Hewitt told Mortgage Business.
“Historically, first home buyer activity has accounted for 12 to 14 per cent of all home loans. We expect to see activity drop below this number in the coming months, after the scheme has been wound back again on 1 January, but then we expect it to bounce back to this level.”
The September Mortgage Index also showed that the average mortgage reached $360,000 for the first time ever.
AFG reported the previous record high of $354,000 as recently as July. The additional rise last month supports the view that both consumer confidence, as well as house prices, are on the rise.
AFG Mortgage Index shows an upturn in investment loans from 27.1 per cent in August to 29.8 per cent in September.
Having spent most of the first half of 2009 well below the long term average of around 30 per cent, this latest figure confirms returning confidence among property investors.
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