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Jessica Darnbrough
First home buyers and investors are expected to dominate the property market in 2012.
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Speaking to The Adviser, RESI's Lisa Montgomery said the latest rate cuts and stagnating property price growth would encourage first home buyers and investors to get on the property ladder.
"Investors and first home buyers are going to be big in 2012 in terms of dominating lending activity. I think we will continue to see conservatism from the upgraders. There are still some people sitting on their hands even though we have seen rates move downwards," she said.
Ms Montgomery's comments support recent data by Loan Market Group which suggested first home buyers would be the dominant market sector heading into the New Year.
Earlier this week, Loan Market Group released the findings of its latest broker poll, which found 36 per cent of respondents expect first home buyers to dominate the housing finance market this year.
Of the 252 respondents, 33 per cent said investors would be the dominant market segment, while 30 per cent said it would be refinancers.
"Our brokers are divided on which consumer group will dominate in 2012 but the majority think first home buyers will be the most active," Loan Market chief operating officer Dean Rushton said.
Mr Rushton said first home buyers were the consumer group to re-emerge from hibernation during 2011, spurred on by the Reserve Bank of Australia lowering the official cash rate twice during the final quarter of the year.
"2011 was a savings year for many potential home owners and with the likelihood of further interest rate reductions and softened property prices, 2012 appears to be primed for first home buyers to enter the market," he said.
