Australia's major banks will continue to lend to first home buyers despite their waning appetitie for risk, a new report has found.
QBE LMI's chief executive officer Ian Graham told Real Estate Business that first home buyers would continue to play a solid role in the strength of Australia's property market.
According to QBE LMI’s mortgage update report, compiled in partnership with BIS Shrapnel, more than 110,000 loans will be written for first home buyers in 2010 – a healthy 27 per cent above the low point of loans to first home buyers in 2003/04.
"The research by BIS Shrapnel shows strong population growth in the first home buyer cohort (25 to 39 year olds) totalling 3.2 per cent over the three years to June 2012. The solid growth in this age group will result in a bigger pool of first home buyers in the market which will support demand in the future,” Mr Graham said.
While the withdrawal of the federal government's first home owners' boosted grant has undoubtedly pushed some borrowers out of the market, Mr Graham said growing rental costs will continue to make home ownership an attractive option for many Australians.
"While ever interest rates are below our historical average and rents are increasing, first home buyers will still be attracted to owning their own home," he said.