ABS Figures Show First Home Buyer Market Collapsing

NEW figures released by the Australian Bureau of Statistics show 60,000 fewer first home buyers entered the mortgage market for the year to May.

This reflects a drop of 5000 loans a month, and comes despite the low interest rate environment.

The ABS says rising costs of living, and interest rates, are factors negatively affecting sentiment in the market.

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Australians Borrow Less for Second Successive Month: ABS

HIGHER interest rates, and a winding-down of government grants for new homes, have contributed to a contraction of housing finance, for the second successive month in November, 2009 (released January 2010).

Strong population growth, pent-up demand, and re-interest in real estate, by investors, is expected to result in the RBA increasing interest rates when it meets next month – making it an unprecedented fourth straight interest rate rise since late last year.

It’s been speculated interest rates could rise between 1 and 3 per cent this year.

According to the recent ABS statistics, the number of housing finance approvals fell 5.6 per cent (seasonally adjusted) in November from October.

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