Business

Rates don't deter first buyers

Mr Smith said cost of living increases as well as an expensive rental market have been contributing factors keeping potential buyers from entering the market.
Mr Smith said cost of living increases as well as an expensive rental market have been contributing factors keeping potential buyers from entering the market. iStockPhoto.com

INTEREST rate movements are currently the least influential factor affecting whether potential first home buyers can enter the property market, according to a survey by leading mortgage broker Loan Market.

Loan Market corporate spokesman Paul Smith said a survey of the company's mortgage brokers found just five per cent thought interest rates are the main reason first home buyer activity is currently subdued.

Mr Smith said 52% of the 221 broker respondents said lack of genuine savings was the main reason keeping first time buyers out of the market.

"The biggest hurdle for first home buyers is saving for that initial home loan deposit," Mr Smith said.

"While it has been well documented that Australian consumers have been prioritising savings, this has been hard for the first home buyers."

Mr Smith said cost of living increases as well as an expensive rental market have been contributing factors keeping potential buyers from entering the market.

He said while a reduction by the Reserve Bank of Australia (RBA) of the current cash rate of 4.25% would be welcome, it does not seem to be a major influence on the first home buyer sector.

"A cash rate reduction will certainly benefit some of the struggling sectors of the economy, and will pressure the banks to scale back any recent rate rises, but first home buyers simply won't come back just with lower interest rates," he said.

Mr Smith said 25% of respondents cited stamp duty as an issue for first time buyers.

"Stamp duty remains an expensive requirement of purchasing property. So much so that it's stalling activity in states where few or no exemptions are applied," he said.

Mr Smith supported the idea of a 'pay-as-you-go' initiative towards stamp duty with payments made over several years in a scheme similar to HECS.

Thirteen per cent of brokers said house prices were the main influence on first time buyers while just 5% said job security.

Survey Results:

What is the main reason first home buyer activity remains subdued?


Topics:  cash rate first home buyers home loans interest rates loan market


Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

Buses run for free on New Year's Eve

Public transport on the Sunshine Coast will be free from 8.45pm on New Year's Eve.

More than 20 extra buses being put on to cope with demand

Coolum dancer makes it big in Canada

17-year-old Coast ballerina awarded bursary to dance overseas.

Local Partners

Daylight saving: 'Draw a line from Goondiwindi to Rocky'

A QUEENSLAND retiree believes he has a solution to the time zone anomaly which sees Queensland operate an hour behind the rest of the east coast.

Puppetry of the Penis secrets revealed ahead of show

The famed Puppetry of the Penis is coming to the Sunshine Coast for shows in Noosa and Caloundra.

WARNING: This interview contains adult themes and traces of nuts

Noll meltdown won't affect Gympie Oz Day concert

Shannon Noll

Photo Contributed

Shannon Noll is still expected to perform in Gympie next Thursday

The surprising problem police face at Woodford Folk Festival

STREET SCENE: Woodford Folk Festival 2016.

The biggest issue for police at Woodfordia is not what you'd expect

Jennifer Aniston wants to return to TV

Jennifer Aniston is desperate to make a return to TV

Madonna hopes for election unity

Madonna hopes Donald Trump's election will "bring people together"

JK Rowling rules out Cursed Child trilogy

JK Rowling has ruled out a 'Cursed Child' movie trilogy

Buckley's chance in psychological thriller

James McAvoy and Betty Buckley in a scene from the movie Split.

Broadway veteran back on big screen with James McAvoy

Daniel MacPherson: acting’s a bit like channel surfing

Australian actor Daniel MacPherson in a scene from the American TV series APB.

THE Aussie export talks about making his mark in the US.

Shopping isn't fun if you can see dead people

Lisa Marie Woodham will be giving readings in Gladstone until Saturday January 21.

Shopping isn't fun if you can see dead people

By the water's edge

Secure your seachange

HOT PROPERTY: Money to spend on land, buildings

File picture.

Sale, leasing of industrial real estate picks up in Mackay

Collapsed Coast company could owe up to $5 million

Staff, ATO, landlords among those out of pocket.

Ipswich block of dirt sells for $582 a square metre

JUST SOLD: A property on the Brookwater golf course sold for a record-breaking $612,000.

Property smashed 2007 record by close to $100,000

Coolum land is hot property

Blank canvas ready to build on

Ready to SELL your property?

Post Your Ad Here!