First home buyers are expected to retreat from the housing market when the government’s first home owner’s grant is reduced in two weeks time.
According to the Australian Bureau of Statistics, the number of first home buyers has already seen a substantial reduction, with the proportion of first home buyers seeking finance as a proportion of the market falling from 28 per cent in April to 25 per cent in July.
Westpac Banking Corp’s group executive of retail banking, Peter Hanlon, told The Australian Financial Review that the bank had also started to see a decline in the number of first home buyers.
Mr Hanlon said first home buyers comprised 30 per cent of Westpac’s new loans for a few months leading up to June, but this had since dropped back to 21 per cent.
“There isn’t an endless supply of first home buyers and while the grant has brought forward people who were thinking about purchasing, we’re beginning to run out of them,” Mr Hanlon said.
A recent survey of first home buyers, conducted by the National Australia Bank, found only one in four respondents were aware that the grant was being wound back on 30 September.