First home buyers do not need additional government incentives, one industry stakeholder has claimed.
The dramatic drop off in first home buyer activity has had industry pundits calling on the federal government to introduce more buying incentives as part of the 2011 budget.
But, BIS Shrapnel’s managing director Robert Mellor told Real Estate Business that first home buyer activity will eventually return to more historic averages – without government intervention.
“I think the market will improve of its own accord. The dramatic drop in first home buyer activity was simply part of a bigger balancing act,” he said.
“First home buyers were quick to buy in 2009 to take advantage of the government incentives. As such, the drop in demand that we have seen since then is simply a correction. Once this has all balanced itself out, we will see a return to more normal activity, especially as interest rates continue to increase at a moderate rate.”
According to the latest data from the Australian Bureau of Statistics, first home buyer commitments as a percentage of total owner occupied housing finance commitments now sits at just 14.9 per cent – a long way from the plus 20 per cent achieved in 2009.