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The number of Australians getting on the property market for the first time has reached a 10-year high, according to new figures.
The latest numbers from the Australian Bureau of Statistics (ABS) showed the number of first home buyers is at its highest since December 2009.
In January, the number of first-time owner-occupiers jumped by 3.2 per cent in one month alone.
These figures make it clear that eligible Australians have taken up the government’s First Home Loan Deposit Scheme, Zippy Financial director and principal broker Louisa Sanghera said.
“The number of first home buyers has been growing for the past year, but the past month saw inquiries to our office strengthen considerably,” Ms Sanghera said.
“Prospective property owners were aware they needed to move quickly if they were going to have any chance of securing one of the deposit scheme’s limited allocations from the start of the year.”
In the first month of this year, nearly 10,000 loan commitments were recorded for first home buyers. The ABS figures showed the number of first home buyer loan commitments for investment purposes accounted for 4.7 per cent of all first home buyer commitments.
Although the lending environment is less restrictive than a few years ago, first home buyers still need to prepare themselves early to secure a loan, Ms Sanghera said.
“First home buyers, more than anyone, need professional advice to understand the ins and outs of the lending space,” she said.
“Long before they decide to buy property, first-time buyers should seek expert advice and instigate a number of budgeting and saving strategies to improve their borrowing capacity.”
Ms Sanghera said eight first-time buyer finance strategies include:
1. Create and stick to a budget before, and after, becoming a home owner, which will help you manage mortgage repayments. This may mean holidays have to cease for a little while.
2. Buy a house first and a car second. Large car loans can significantly impact borrowing power.
3. Reduce discretionary spending including Uber Eats and Afterpay purchases.
4. Cut up credit cards or reduce their limits.
5. Research the areas that you can afford and then consider applying for a loan pre-approval before starting your property search.
6. Apply for a loan pre-approval at your likely maximum purchase price. You can always reduce the amount of loan required, but it can be difficult to increase the loan once approved, which can cause unnecessary delays.
7. Understand the time frames and steps involved to secure one of the government’s First Home Loan Deposit Scheme allocations.
8. Speak with a broker to understand their borrowing capacity and requirements. Professional mortgage brokers hold a wealth of knowledge that they can share with prospective property owners, including how to organise the necessary paperwork.
Would-be property buyers should be prepared for their loan applications to take a few weeks as their broker and lender worked through the necessary checks and balances, she said.
“The most important thing is to stay calm and be prepared for some bumps in the road,” she said.
“Brokers submit loan applications day in and day out and can professionally manage the process on their behalf.”
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