First home buyers have been taking out “super-sized” mortgages, spurred on by the Government’s cash incentives and low interest rates, according to new research.
The Reserve Bank warned yesterday that the super-sized loans were an “unusual outcome” given that loans to first home buyers were normally smaller than loans to other home buyers.
However, figures compiled by the Australian Bureau of Statistics show the average loan size for first home owners was up from $246,500 a year ago to $269,100 in July. This compares with the average loan size for all owner-occupied housing commitments of $266,900.
First home buyers have also helped to push up new home sales, according to the latest Housing Industry Association report. New home sales rose by 11.4 percent in August, the best monthly result for over three and a half years.
According to analysts, the growing loan size suggests first home buyers have been relying heavily on government grants of up to $21,000 rather than putting their own savings into it.
Banks squeeze out first home buyers