More Australians are now taking the step of buying their first home than have done so in the past two years, assisted by high employment levels and relatively stable mortgage finance rates.
Latest ABS figures on housing finance during November 2005 show that first home buyers now account for 18.3 per cent of all housing loans. This reflects a steady increase over the past year in first home buyers as a percentage of the total home finance market and is the highest level reached in approximately two years.
The statistics showed the overall value of housing loan commitments on a seasonally adjusted basis fell by 0.4 per cent from the level in October, due to a withdrawal of property investors from the market. The value of investment home loans fell by 3.7 per cent; loans for owner occupied housing increased by 1.2 per cent.
"A striking aspect of the figures is the continued increase in borrowers taking out fixed interest loans. This rose to 14.7 per cent of the total from 12.9 per cent in October after an increase that month. The official figures substantiate anecdotal information from our members that this trend has been strengthening", chief executive of the Mortgage Industry Association of Australia (MIAA), Phil Naylor said.
"There are two drivers behind the increase: attractive fixed rates and fear of future rate increases."
"Some fixed interest loan rates have been below or close to variable rates - an inverse situation to the normal premium that applies for the certainty that a fixed rate loan offers. Preference for fixed rate loans, or the use of a combination of fixed and variable loans, also indicates borrowers are factoring in a possible future interest rate increase", Mr. Naylor commented.
Queensland had the highest monthly increase in the number of home loans for owner occupied housing (up by 2 per cent), followed by New South Wales (up 1.2 per cent), Victoria (up 0.2 per cent), Tasmania (up 1.4 per cent), South Australia (up 0.2 per cent), Australian Capital Territory (up 0.6 per cent) and Northern Territory (up 0.6 per cent). A decrease was recorded in Western Australia (down by 0.4 per cent).
