More and more investors are moving into the market, making it tricky for first home buyers at the beginning of their property journey.
An analysis of Australian Bureau of Statistics housing finance data by RateCity reveals investor finance commitments accounted for the largest share of the market in July, with 45% of all new home loan dollars now ahead of upgraders at 44%.
Meanwhile first home buyers now account for just 11%, the lowest level since 2004.
Alex Parsons, CEO of RateCity.com.au, said investors had been shouldering their way into the market at the expense of first home buyers in recent years.
“Investors have been ramping up their presence in the market for some time, and now account for the biggest proportion of all new home loan dollars settled, making it harder for first home buyers to get a foot on the property ladder,” he said.
“At one point in 2009, when government incentives for first home buyers were high, first home buyers and investors were shoulder to shoulder, each accounting for about a third of the home loan dollars financed.”
The boost in property investment through SMSFs, was “adding fuel to the fire”, he added.
First home buyers – whether they’re buying to occupy or invest first up – need to be ready to pounce on properties.
Having financed pre-approved is key, and having a full understanding of the costs involved in buying a property, such as stamp duty. It’s also wise to build in a buffer, ideally saving 20% for a deposit and making sure you have enough to cover repayments if interest rates go up or new costs emerge.
It pays to explore all support available if you’re a first timer, as even a little can be a big help.
Here’s a run down of first home buyer grants and initiatives for each state and territory.
originally posted on realestate.com.au