Property professionals say first-time buyers are flooding back into the market and the Morrison administration’s first home loan deposit scheme, due to start in January, will put further upward pressure on prices.
Banks have said the interest rates and other features of the loans will give them high market competitiveness, the sources said. The documents were trade secrets until the winning bid was announced in late November. Australian house prices have rebounded in recent months as interest rates have fallen, prudent regulators have eased lending restrictions and labor’s proposals to phase out negative gearing and capital gains taxes have expired.
Past government initiatives to help first-time buyers have increased the pressure on auctions and contributed to rising prices. Louis Christopher, a property analyst at SQM Research, said the Morrison administration’s free LMI for 10,000 first-time buyers a year would push prices up slightly from January. In September, 9,622 loans were made to owner-occupiers, up 6.8 per cent from a year earlier. First-time home buyers accounted for 19.2 percent of new loans, up from 17.8 percent a year ago, according to Goldman Sachs economist Andrew Boak.
https://www.afr.com/property/residential/first-home-loan-scheme-to-increase-prices-20191111-p539bv