Australia’s first home buyers are still taking out loans as property investors step back, data shows
Summary
First-time home buyers in Australia continue to take out many mortgage loans with government support, while property investors are borrowing less. The government’s 5% deposit loan guarantee program has helped new buyers get into the market by reducing upfront costs like mortgage insurance.Key Facts
- New data shows only first-time buyers are applying for more home loans compared to June.
- Home loan demand dropped overall by 5.4% by June, with investor loans falling 8.6% and first-time buyer loans dropping only 2.9%.
- First home purchase activity increased in some states like New South Wales, South Australia, Tasmania, and the Australian Capital Territory.
- The 5% deposit scheme lets eligible buyers borrow up to 95% of a home's price with a government guarantee, removing the need to pay costly mortgage insurance.
- Property prices have fallen in Australia, but those eligible under the scheme have seen smaller price drops.
- Housing Australia says scheme users saved more than $15,000 on average by not paying mortgage insurance.
- Over 320,000 people have bought homes with help from the scheme since 2020.
- The scheme led to more than 5,000 new guarantees issued monthly since February, slightly dipping below that in July but still higher than before the scheme’s expansion.
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