First home buyers are back

Lower interest rates and government incentives have seen first home buyers return to the market.

According to the ABS, the percentage of home loans taken out by first home buyers rose to a seven year high of 23.6% in November 2008 – a substantial increase from the 19.5% recorded in October 2008.

The data also showed that first home buyers are especially eager to benefit from the government’s larger $21,000 grant for new homes - the number of loan commitments for new dwellings rose 9.8%.

Overall, the number of owner occupied loans taken out in November 2008 also continued to inch up, rising 1.3%, seasonally adjusted, to 49,192.

Pressure is now on for the government to continue the first home owner incentives past the proposed cut-off date of 30 June 2009.