First home buyers are still around according to a report by RP Data, despite speculation they had given up trying to afford their first purchase. The number of first home buyers entering the market has improved after falling to their lowest levels in six years in January. Based on housing finance data issued by the Australian Bureau of Statistics for May, first home buyers accounted for more than 15 per cent of all owner occupier finance commitments. There were 8,226 new home loan commitments by first home buyers for May, that's 17 per cent higher than the previous month. RP Data reports we're unlikely to see first home buyer activity increase more in the short-term, with consumers becoming extremely debt cautious.
A national study of more than 1000 participants by Mortgage Choice shows the biggest factor influencing first-time property investors is financial security. 57 per cent saw more benefits from property investment than shares. A further 84 per cent said they already know how much of an interest rate buffer they need to factor into their repayment budget.
Interest rates appear on hold for some time to come. Minutes released from the Reserve Bank of Australia Board meeting for July have noted that the urgency to hike rates has been reduced. A cautious household sector, soft housing market, a rise in mortgage arrears and falling house prices in Western Australia and Queensland were also noted as reasons for rates to stay as they are.
Now to housing trends. IBISWorld has forecast that multi-unit apartment and townhouse construction will grow by 10.6 per cent over 2011 to 2012, reaching $11 billion in revenue. The report says that housing attitudes are shifting, with big backyards in the suburbs being traded in for balconies in the centre of the city.
And property investors are looking to the Canberra property market as a safe investment. A report by ACT Treasury shows that Canberra's residential property market has made some modest gains, up by 4 per cent since June last year. A separate report by CB Richard Ellis has also shown the capital has escaped the worst of the slump, with house prices retaining value. The stability in the government sector and stable employment has been cited as a major factor in the resilience of house prices.
