THE surging demand from first homebuyers to enter the property market may have hit a peak, judging by a new survey of housing mortgages released this week.
THE surging demand from first homebuyers to enter the property market may have hit a peak, judging by a new survey of housing mortgages released this week.
Western Australia's housing market has been propped up during the past year by the first homeowners grant boost, according to the Housing Industry Forecasting Group's mid-year update.
The boost, an extra $7,000 for established homes and $14,000 for new homes, led to a situation where new mortgages for first homebuyers dominated the market and created an artificial boom.
HIFG chair Stewart Darby said in a statement that without the first homebuyers scheme, dwelling starts for 2008-09 in WA would have suffered a larger fall than the initial 10 to 15 per cent drop forecast in October last year.
The rush to secure government grants created a counter-cyclical situation with an extremely active first homebuyer segment but a very quiet sector overall.
"HIFG continues to forecast a 5 per cent decline in housing starts next financial year," Mr Darby said.
"With developers' current stock of conditionally approved residential lots still close to 70,000 across the state, HIFG anticipates no shortage of residential building lots over the next two years, the limit of the group's forecast horizon."
Figures released this week by Perth-based AFG, Australia's largest mortgage broker, showed first home buying activity in Australia had peaked.
In March 28.1 per cent of all new mortgages were arranged for first homebuyers, down to 24.8 per cent in May.
While WA did not follow that exact trend, new first homebuyer mortgages in May were at the lowest rate this year at 22.2 per cent.
AFG data also showed that investors may be starting to return to the housing market after mortgages advanced to investors came off its all-time low of 24.5 per cent in March to 28 per cent in May.
AFG said it was a strong indication that low interest rates, good rental yields and the relatively strong performance of property over equities had contributed to a growth in investor confidence.
According to AFG, lower interest rates have not enticed borrowers to enter into fixed rate loans despite there being no further reduction to the cash rate since the beginning of April.
