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A major bank is offering first home buyers a $1,000 rebate on applications submitted before 31 March 2014.
The Commonwealth Bank announced the scheme to brokers this week, saying that the lender recognises the difficulties first home buyers currently face.
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“Since the reduction of the various government incentives for first home buyers, the proportion of them entering the housing market has declined. Our $1,000 rebate is designed to assist customers with the initial costs associated with home ownership,” CBA said in a statement.
The number of first home buyer commitments as a percentage of all owner-occupied housing finance commitments fell to 12.3 per cent in November 2013 from 12.6 per cent in October 2013, according to the Australian Bureau of Statistics.
First home buyer commitments have dropped dramatically in the past 12 months, from 15.8 per cent in November 2012 and 18.7 per cent in October 2012.
The rebate will be paid into a CBA transaction account or Everyday Offset account in the customer’s name within four weeks of the loan funding.
Mortgage Choice CEO Michael Russell was one key stakeholder who was happy to see an incetive to help first time buyers onto the property ladder.
"This latest initiative by the Commonwealth Bank of Australia is sure to be warmly received by first home buyers as it raises the stakes in the competition for new mortgage customers," Mr Russell said.
"Firstly, the initiative shows empathy for first home buyers who are currently struggling to compete with very aggressive property investors in this hot market.
"Secondly, from a marketing perspective, I think this initiative is sure to have a lot of cut-through given how topical the struggles of first home buyers have been. Recent data from the Australian Bureau of Statistics found that first home buyers accounted for just over 12 per cent of all home loans written in November – a historical low. As such, any incentive or initiative that can encourage first home buyers onto the property ladder will no doubt be well received.
"Thirdly and finally, it is pleasing to see that the initiative not only applies to first home buyers purchasing an owner occupied property, but those who are buying an investment property as well. Our data shows first home buyers are very discerning and they are seeing increasing merit in making their first property purchase an investment dwelling. Purchasing an investment property allows first home buyers to get onto the property ladder sooner rather than later and gives them the ability to buy where they can afford, while still living in an area that is better suited to their lifestyle requirements."
