Released 14 May 2012



Interest rate movements are the least influential factor affecting whether potential first homebuyers enter the property market, according to a survey of mortgage brokers. 

Loan Market Corporate Spokesman Paul Smith said a survey of the company’s mortgage brokers found just five per cent thought interest rates were the main reason first homebuyer activity was subdued.

Of the 221 broker respondents, 52 per cent believed a lack of genuine savings was the main reason keeping first-time buyers out of the market.

“The biggest hurdle for first homebuyers is saving for that initial home loan deposit,” Mr Smith said.

“While it has been well documented that Australian consumers have been prioritising savings, this has been hard for the first home buyers.”

Thirteen per cent of brokers said house prices were the main influence on first time buyers while just five per cent said job security.

Cost of living increases and an expensive rental market have also been contributing factors keeping potential buyers from entering the market, he added.

Mr Smith said 25 per cent of respondents cited stamp duty as an issue for first-time buyers.

“Stamp duty remains an expensive requirement of purchasing property. So much so that it’s stalling activity in states where few or no exemptions are applied,” he said.

Mr Smith supported REINSW’s idea of a ‘pay-as-you-go’ initiative towards stamp duty with payments made over several years in a scheme similar to HECS.