More than 190,000 Australians took advantage of the government’s first home buyer stimulus incentives in 2009, statistics from RP data has found.
According to the latest Property Pulse report, owner occupiers took out finance for approximately 739,000 dwellings, 26 per cent of which was first home buyers.
RP Data’s research analyst Cameron Kusher said while many people believed first home buyers had artificially inflated property prices, statistics show this was simply not the case.
“Obviously first home buyers accounted for a much greater portion of the market during 2009 than in the past, however, their portion still paled in comparison to non-first home buyers,” Mr Kusher said.
“It's no real surprise that first home buyers were so active during 2009, given that the government was offering the first home owners grant boost.”
According to Mr Kusher, historically low interest rates also helped first home buyers enter the market.
Similarly, many of the state government’s were offering incentives such as low or no stamp duty on more affordable property purchases.
As such, there was a 55 per cent increase in the number of first home buyers entering the market, in comparison to the previous year.
“Between 1992 and 2009 there was an average of just over 116,000 first home buyers annually. Not only was the level of activity during 2009 the highest on record, it was 64 per cent greater than the long term average level of activity,” Mr Kusher said.
But despite 2009's stellar performance, Mr Kusher said he expects lower levels of value growth in the market in 2010 due to the removal of the first home owner’s grant boost.
"With first home buyers so active during 2009, we expect them to fall back to historic (if not slightly lower levels). The strong first home buyer activity during 2009 eased rental rates and with their movement into ownership likely to slow to at least historic levels in 2010 we anticipate that upwards pressure on rental rates is likely to return during 2010," he told The Adviser.
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