RBA names rising house prices as main enemy of first homebuyers

Font size :
The Reserve Bank of Australia (RBA) has argued that a first home buyer’s “biggest enemy” is the rising home values and not jumps in interest rates.

Governor Glenn Stevens said it is important for the RBA that first homebuyers have the ability to enter the housing market when he was asked by a school student at a parliamentary committee hearing. The student asked if first home buyers will “get caught in a debt trap once rates start rising again”.

"The biggest enemy for first homebuyers is rising house values," Stevens said. "It's an important social issue how your generation will afford to house itself if you want to live in a city where the supply side of the market is unduly constrained."

He also urged for a "more innovative and more flexible" use of land in major cities like Sydney.

Another student asked about the bank’s protective measures for the next generation of homebuyers, to which Stevens answered “having more dwellings will help push the prices down”.

Meanwhile, deputy RBA governor Philip Lowe added the need for investment in more public transport to help first homebuyers.

"I think as a society one of the things we can do is invest more effectively in transportation to increase the supply of well-located land and put downward pressure on land prices and make housing more affordable," Lowe said.
 

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker

Mortgage News and Articles

How to tell when a housing market is cooling How to tell when a housing market is cooling

You need to check clearance rates, listings, and the price gap, among other factors Read more

Growing demand for green apartments in Sydney Growing demand for green apartments in Sydney Both owner-occupiers and investors favour eco-friendly buildings for their energy-saving features and reduced environmental footprint ... Read more

Are property investors as rich as they appear? Are property investors as rich as they appear? A multi-property portfolio doesn’t guarantee easy millions ... Read more

Be proactive about getting a better mortgage deal Be proactive about getting a better mortgage deal Apathy could be costing you a considerable amount of money over the lifespan of your loan ... Read more

More mortgage news and articles

Sponsored Links

Sunday, Sep 24, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords