First home buyers in more debt than ever

First home buyers are taking on more debt than ever before, according to the Australian Bureau of Statistics (ABS).

During December 2009, the average home loan size increased by $6,200 for first home buyers to $290,100.
RateCity chief executive officer Damian Smith said if interest rates were to increase by one per cent, many first home buyers would find themselves under mortgage stress.

And the average loan size is expected to increase further as competition for property heats up.

According to the latest RP Data statistics, there was a strong level of property activity in January – higher than any level recorded in 2009.

“Many real estate agents were forced to cut their holidays short due to unexpectedly high prospective vendor enquiries post Christmas,” a statement from RP data read.

“Also, pre-listings activity from real estate professionals is already higher than at any time over the last two years suggesting that the amount of stock about to come on the market is going to start ramping up over the coming month.”