First home buyers take advantage of affordability
Improved housing affordability is seeing a new wave of first home buyers building, according to a report by financial comparison website RateCity.
The RateCity First Home Buyer Index - Spring 2012 fell by nine points to 114 points in the 12 months to July 2012. This is the biggest fall in the three years since RateCity began the affordability index.
The RateCity First Home Buyer Index measures how difficult it is for first home buyers to enter the property market and maintain a mortgage based on indicators such as average income, average loan size, basic variable rate, monthly mortgage repayments, and percentage of income towards repayments.
Michelle Hutchison, spokesperson for RateCity, said several key changes resulted in a more affordable borrowing environment for first home buyers.
"An uncertain economic outlook and lower consumer confidence hasn't discouraged many first home buyers from biting the bullet and jumping into the property market.
"For the first time since we began this Index three years ago, we haven't seen the first home buyer market improve so dramatically in a 12 month period. Interest rates are down, property values and the national average first home loan size are flat, which resulted in the RateCity First Home Buyer Index dropping by nine points."
Ms Hutchison said she was surprised to see the proportion of first home buyers back to "normal" levels seen before the Global Financial Crisis (GFC) began in 2007.