The proportion of first homebuyers entering the property market continued its rapid decline, falling to just 10.4% of the total market during the month of March, a new data from AFG showed. The latest figure is a massive drop from the 28.1% recorded in March 2009 when first homebuyers were at their most active phase.
However, first homebuyer activity started to slump rapidly from August last year and has continued unabated following the withdrawal of the federal government stimulus by the end 2009. The rising interest rates have also deterred many prospective buyers to get into the market.
In contrast, investors have continued to dominate, with the proportion of investment loans sold rising to 35.1% in the same month. This is a large jump from the 24.5% recorded in March last year. Investor activity has been steadily rising since May 2009.
Standard variable loan was the most popular, accounting for 58.9% of the total mortgages sold by AFG. Despite expectations of further interest rate hikes, fixed rate loans remained at their all time lows with only 2.5% of property buyers opting to fix their mortgages.
There is a wide consensus among brokers and experts that fixed rate products already have several rate rises priced into them, and therefore remain expensive and unpopular among borrowers.