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First home buyer interest dwindles

Official ABS housing finance figures released today, have revealed the number of first home buyers entering the market fell in June.

The initial high of the first home owners grant has begun to wear off, as the number of first home buyers (as a percentage of all borrowers) fell to 27.1 percent in June from 28.5 in May, easing for the first time in eight months.

However the number of home loans rose 1.1 percent in June, seasonally adjusted, increasing for the ninth straight month.

With the first home buyers’ grant expected to be cut in half at the end of September and eliminated by the end of the year, and recent reports by RBA Governor Glenn Stevens suggesting that interest rates will begin to rise over the coming months, there seems to be less incentive for first home buyers to enter the market.

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