First homebuyers stay on the sidelines

First homebuyers stay on the sidelines

Posted on Wednesday, November 19 2014 at 2:39 PM

First time buyers are continuing to stay away from the property market, according to a report by lenders mortgage insurer Genworth.

The company’s 2014 Home Grown: Mortgage Industry Perspectives report
surveys 1200 consumers and industry professionals.

Bridget Sakr, chief commercial officer at
Genworth, says participants rate the wellbeing of the mortgage market positively,
although first homebuyer participation continues to slow.

“While the overall health of the market was
seen as good, the survey suggested that first homebuyers comprise 10.5 per cent
of all lender-originated loans and 18.9 per cent of all broker-originated loans
which supports arguments that this group is finding it increasingly difficult
to enter the housing market.”

Despite this, participants felt that mortgage
broking will continue to gain popularity, particularly with first-time buyers
who are almost twice as likely to apply for a mortgage through an intermediary
rather than directly through a lender.

The study also reveals that there’s been a
shift in perceptions on what issues will have the biggest impact on the

“In 2014 we’ve seen a change in this
situation, with 37 per cent of lenders now believing that market entry by supermarket
groups would most likely have the largest impact on the market, while at the
same time downgrading the potential influence of online competitors and
superannuation funds.”

In addition, respondents
felt maintenance of the current interest rate was sensible and sustainable.

“While it’s acknowledged
that rate rises or a correction in property prices could change this
assessment, industry experts predict stable interest rates over the next year
and believe that factors, such as population growth and supply constraints, may
put a floor underneath property prices over the short term.”

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