According to brokers the latest interest rate cut and the improvement to the first-homebuyer's grant have brought about a surge in demand for mortgages over the past few days.
After the RBA announced the latest interest rate cut, here at Rate Detective we have noticed significant interest in traffic to our site with increase of over 250 per cent in last week. Visits to other mortgage websites have increased as well. Inquiries are presently numbering between 3000 and 4000 a day in Australia.
First homebuyers now account for 40 per cent of the inquiries but there is also a fair bit of interest across the board.
Consumers are feeling a bit more confident about buying again and the latest interest rate cut, a shortage of rental properties, and the homebuyer's grant has spurred confidence once again.
Australian Financial Group (AFG) has reported that mortgages for first-homebuyers rose strongly in January, accounting for just over a quarter of the entire market. The AFG also noted that mortgage sales to first homebuyers rose to 25.8 per cent of the total in January, up from 21.2 per cent in December 2008. In June 2008 first-homebuyers accounted for just 10.6 per cent of mortgage sales.
Mark Hewitt general manager of sales and operations from AFG stated that the January figures are the best since the AFG started collecting data four years ago. He went on further to mention that it was a good time for workers with permanent employment to buy property as it had become more affordable, and added that younger people with fairly secure jobs had become an important force in the property market over the past few months.
With the Government's subsidy, prices coming down and interest rates at an all time low it is a good time to buy.
The big banks have passed on most of the rate cuts since the Reserve Bank lowered the cash rate in September by four percentage points to a 45 year low of 3.25 per cent.
The Federal Government doubled the first-home owners' grant for established dwellings to $14,000 and tripled it to $21,000 for people buying newly built homes in October last year. Official data has shown that average house prices in Australia fell by 3.3 per cent in 2008, which is the biggest annual fall in 23 years.