Recent data published by the Reserve Bank of Australia (RBA) showed that since 2009 home loan approvals in the country have been on the rise, fuelled by homeowners’ increasing interest in moving into new homes and by the growing investor demand for mortgage funding, the Property Observer said in an article.
Between 2009 and 2013, however, the demand for mortgages from first-time buyers has been quite modest. Since the start of 2013, the RBA has seen no indication that demand for property from people looking to buy their first home will increase over the course of the year. This downtrend could be explained by the government’s decision to scrap its scheme to provide grants to first-time buyers in 2010. The programme, which was introduced in 2008 to stimulate the housing industry and boost the market, provided an additional $7,000 to people looking to buy an existing home for the first time and $14,000 for newly-built properties. In 2009, the grant was cut by half and those buying or building new homes were eligible for $7,000, while those purchasing established homes could obtain a $3,500 grant.
Australia currently has the lowest mortgage rates seen in nearly 50 years, which will result in average savings of around $140 for homeowners when covering their monthly loan repayments. According to the Sunday Telegraph, mortgage rates will reduce even further over the next 12 months as the country moves away from the dependence on its once-strong mining industry.