Australian Property News
Major banks toughen up with first homebuyers
Posted on Monday, April 19 2010 at 10:54 AM
The major banks have recently made it harder for first homebuyers to enter the market, according to the Real Estate Institute of Australia (REIA) president David Airey.
"The banks have indicated that they have increased the deposit requirements for first homebuyers from 10 per cent to at least 15 per cent and in some cases to 20 per cent," said Airey.
"Even at 15 per cent, at the current median house price of $514,599, the additional deposit required is almost $26,000."
First homebuyers have already started to rapidly withdraw from the market, according to the Australian Bureau of Statistics housing finance figures for February 2010, and a decrease to the loan to valuation requirement will only see this figure plunge further, said Airey.
The REIA has proposed two options to address the issue, the first one being to set the First Home Owners Grant to $15,000 for all housing, new and established, and indexed to median house price movements annually.
"This would both address the relative decline in the size of the grant compared to house prices and the increasing deposit gap for first homebuyers," Airey said.
The second proposal would address the deposit gap and declining affordability. This would involve voluntary superannuation contributions used to raise a deposit for a first home.
This option would be an adjunct to the governmentís First Home Savers Account but allow more flexibility to decide the portion required for the home purchase.
Airey has written to the Treasurer with his concerns and proposals.
"This is a very important issue and I hope that the Treasurer will give favourable consideration to the two proposals, aimed at providing a solution to an ever deepening problem for Australiaís first homebuyers," he said.
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