The number of first home buyers entering the property market has fallen by 27 per cent in September, according to Australian Finance Group (AFG).
Data from AFG showed the volume of home loans for first home buyers had fallen from $489 million in September to $357 million in October.
This contributed to an overall month-on-month contraction of 11.5 per cent, with the total volume of mortgages arranged by AFG falling from $2.9 billion in September to $2.6 billion in October.
AFG’s general manager of sales and operations said the fall in first home buyer activity was largely expected, given that September was the last month of the reduced federal grant.
“Most people were expecting a fall in first home buyer activity, so the decline, in itself, comes as no surprise. But the fact that the rate rise cycle kicked in at the same time delivers something of a double-whammy. With the second rate rise announced last week we’re expecting that there will be continued caution on the part of buyers,” Mr Hewitt said.
At their peak, first home buyers accounted for more than $732 million or 28 per cent of AFG’s total volumes.
The decline of first home buyers was strongest in WA, where the volume fell by 35.5 per cent. Queensland was not far behind with a 27.6 per cent drop, NSW recorded a 27.6 per cent fall and Victoria managed a 26.2 per cent decrease.
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