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The federal government’s move to beef up the First Home Owners Grant (FHOG) is already seeing increased activity in the sector, according to major brokerages.
The Australian Finance Group (AFG) reports that first home buyer transactions hit a 12 month high of 1,150 in October.
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First home buyers accounted for 16.43 per cent of AFG customers over October compared to 14.37 per cent the previous month – and well up on the 10 per cent recorded in April, May and June.
Mortgage Choice has also observed a strong trend among young singles and couples keen to take advantage of the FHOG, falling interest rates and sluggish property markets.
“We have seen a strong level of enquiry among first home buyers borrowing in the vicinity of $300,000-$350,000 for their first property.
Apartments and units are popular choices at this time,” said Mortgage Choice’s senior corporate affairs manager Kristy Sheppard.
Jennifer Nielsen, LoanMarket’s chief executive, said 70 per cent of enquiries to the group’s call centres were from couples, one quarter from single buyers, and around five per cent from those purchasing with friends.
In terms of loan sizes, Ms Nielsen said couples tended to look for loans of approximately $500,000, while singles took out average loans of around $300,000.
But while large brokerage groups have reported a rise in first home buyer activity, it appears that many front line brokers are yet to see the same trend.
Mark Mellick of Auspak Financial Services said he had not seen much activity from the first home buyer sector and said it was likely to take a few months for confidence to return.
“People are still very cautious and I think they are waiting to see some certainty in the economy,” he said.
Simon Pressley, managing director of 6 Point Finance, said his business was positioning itself to capitalise on the return of first home buyers to the market.
“It’s certainly a market we see as an opportunity,” Mr Pressley said.
Mr Pressley said many potential buyers did not realise they could be eligible to enter the market.
“We are putting a kit together for potential first home buyers to address the many questions they might have, such as how much they can borrow and what sort of finance is available,” he said.
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AT A GLANCE
• FHB transactions hit 12 month high in October
• Strong FHB enquiry for $300k-$350k loans
• 70% of FHB enquiries from couples
• 25% of FHB enquiries from single buyers
