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




Police and SES crews find missing Boonah woman

Suzanne Coghill is missing, last seen at a property on Hardcastle Rd

60-year-old went missing on Tuesday afternoon

Excellent! Wayne's world is complete on council

VISION: Division 5 councillor Wayne Wendt has big plans for the future of his division and the city.

Ipswich councillor has found his niche

Ipswich fuel cheaper than Brisbane today

A hand holding a petrol bowser putting petrol in a car, Tuesday, October 01, 2013.

Get in fast as prices dip below $1 a litre

Latest deals and offers

The Hard Word reviews Kyzer Soze

Kyzer Soze are playing Brisbane tomorrow at the Crowbar in Fortitude Valley. Photo Contributed

Kyzer Soze summon the evil for this mighty slab of death metal

It's getting very Rude over at the Racehorse

FUNNY: Rodney Rude will be at the Racehorse Hotel.

Australia's top funny man is back

Britney Spears 'almost drowned' in Hawaii

Britney Spears has revealed she 'almost drowned' while on holiday

Doco reveals real story behind Black Hawk Down

Former Black Hawk pilot Mike Durant shares his story, which helped to inspire the movie Black Hawk Down, in the TV series No Man Left Behind.

FORMER pilot recounts ordeal which inspired a Hollywood movie.

What's on the big screen this week

Toby Kebbell and Jack Huston in a scene from the movie Ben-Hur.

AN OLD classic returns to the big screen with a new young star.

Bachelor Richie gives bacon-loving Noni the boot

Noni Janur features on this season of The Bachelor.

TOOWOOMBA swimwear designer still single but focusing on her career.

ISLAND FOR SALE: Cheap Fraser Coast island drops price again

Suna Island in the Great Sandy Strait will be auctioned by Ray White Hervey Bay on Saturday morning.

This is the cheapest island you will find for sale in Australia

How a family home can fit on a 250sq m block

This is what you can build on 250m2.

Here's the floor plan of a home built on 250sq m

$100m plan for Curtis Island 'world class' luxury resort

$100 million resort: Top views at Turtle Street at Curtis Island.

"At the moment we think it meets all the town planning approvals.”

Coast building approvals at seven-year high: report

The the 2015/16 Development Indicators Annual Highlights Report documents local development activity that took place during the last financial year.

New report shows increasing development on the Sunshine Coast

Top honours for Mackay and Whitsunday builders

The Kerrisdale Gardens property from Paynter Dixon Queensland which won them Project of the Year.

Mackay and Whitsunday builders awarded top honours last night.

Investors eye Gladstone's $4m island with resort approval

UP FOR SALE: Turtle Island is on the market.

CHINESE and Sydney investors flag interest in Gladstone island.