In the past two years the average home loan amount for first home buyers has risen by 23% showing home loan inflation. This increases fears as the Government incentives for young buyers have been said to be falsely inflating the market.
The average home loan amount increased from $228,600 to $280,600 a massive $52,000 in just two years. The significant increase in first home buyers in recent months has seen first home buyers become an important part of the residential home loan market.
The actual number of first home buyers also rose sharply; rising from just over 9,000 to more than 14,400 in the past year. With so many first home buyers entering the market home loan inflation could make it harder to buy.
First Home Owners Grant
The Federal Government’s First Home Owners Grant provides up to $21,000 for those building new homes and $14,000 for those purchasing established homes. This initiative is being progressively phased out, and will be obsolete after the end of the year.
What a lot of people believe the government incentives appear to have done, is transfer the money from those who are borrowing money to buy their first homes into the pockets of those who are selling at a more attractive price.
A worrying fact is the increasing rate of unemployment in the current economic climate. This leads to concerns of unpaid debt which ultimately may lead to a further increase in home repossession in the future.