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First home buyers leave market as grants phased out

First home buyers are leaving the property market at a record pace as a result of rising interest rates and the withdrawal of the Federal Government grants, latest figures show.

Official ABS figures yesterday showed the number of new home loans issued in November dropped by 5.6 percent after the First Home Owners Boost was cut from $7000 to $3500 for existing houses at the end of October; while first home buyers’ share of new loans fell to 22 percent, from 26 percent in October.

More falls are likely in months ahead, as the remaining $3500 boost was removed at the end of December.

Commenting on the figures, Treasurer Wayne Swan said he is not surprised by the results.

”As anyone in the housing industry will attest, the Government’s housing stimulus measures have been an undeniable success in boosting activity in the sector to very high levels, so obviously the withdrawal of those measures will have some impact,” he said.

Jessica Stanic

Jessica Stanic

Jessica has a background in both marketing and journalism and is dedicated to making the website the leading online resource for small to medium businesses with ambitions to grow.

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