By: Staff Reporter
A recent survey has found that brokers have largely written off first home buyers, but there are still opportunities in this segment.
The Adviser’s latest sentiment survey revealed that just 2.2 per cent of brokers expect the first home buyer segment to be the most active market over the coming quarter – a 42.9 per cent drop from this time last year.
First home buyers are also treading with caution, preferring to sit and watch what the RBA does with the cash rate before making the leap into the property market.
Bankwest’s latest annual housing report, released earlier this week, found it takes 4.5 years for the average first home buyer to save the 20 per cent for a house deposit, up from 3.7 years in the previous annual report.
In other words, the average first home buyer needs to raise $85,800 deposit for a median priced house, compared with $78,100 a year earlier.
And the situation is worse in more expensive parts of Sydney, Melbourne and Perth, with first-time buyers needing to spend a decade saving up for a deposit to enter the property market in 26 local government areas.
But QBE LMI’s chief executive officer Ian Graham said buyers didn’t need to have the medium deposit requirements to achieve their dream of home ownership.
Highlighting its support for the first home buyer sector, QBE LMI has reminded the market that it continues to provide lenders and borrowers with access to 95 per cent loan to value (LTV) business.
Last year, the company helped more than 50 per cent of 190,000 first home buyers enter the property market.
Earlier this year, Mr Graham told the Adviser that the first home buyer sector should remain relatively strong throughout 2011.
According to Mr Graham, more than 110,000 loans will be written for first home buyers in 2010 – a healthy 27 per cent above the low point of loans to first home buyers in 2003/04.
“The research by BIS Shrapnel shows strong population growth in the first home buyer cohort (25 to 39 year olds) totalling 3.2 per cent over the three years to June 2012. The solid growth in this age group will result in a bigger pool of first home buyers in the market which will support demand in the future,” Mr Graham said.
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