Australia’s struggling first-home market finally looks set for recovery as buyers regain confidence in the property and financial markets. Falling house prices in each capital city and in regional areas such as Cooma, as well as a cut in lending interest rates are expected to spearhead renewed activity.
A savage slump in first-home loans fuelled by a flood of government incentives during the global financial crisis caused loan numbers to plunge 30 per cent below their long-term average. However, latest research suggests a return in demand is on its way.
According to a housing outlook report, the 60,000 first-time buyers who were “pulled forward” by the GFC incentives have now washed through the market. The report says, data for the first six months of 2011 indicates that although first-home buyer loans declined in year-on-year terms, the rate of decline has slowed. Loans to first-home buyers in the latest June quarter were only 2 per cent below the same quarter the year before.
First-home buyers are vital to the overall real estate market because they provide an impetus for “upgraders” to enter the market. Demand from upgraders is greatest when there is strong demand (to buy) their current dwelling.This needs healthy demand from first-home buyers to provide demand for their existing dwelling and encourage them to move on. First-home buyers’ demand for new whitegoods, furniture and so forth also results in a healthy economic stimulus.
The data suggests that first-home buyer numbers which have been about 95,000 a year during the past two years are forecast to climb above 110,000 in 2012 and back to near their long-term average of 131,000 the next year.
Cooma real estate agentsm like Fisk and Nagle First Choice, can help first home buyers find a suitable first home.
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