Sydney and Melbourne’s continual price growth doesn’t seem to be scaring away people looking to break into the property market in the two cities, with one buyers’ agency changes its pricing structure in light of increased demand from first time buyers.
Buyers’ agency Cohen Handler has announced that it will offer first time buyers a 10% discount on services and a 12-month payment plan that is part of the firm’s increased focus on home buyers rather than investors.
Cohen Handler co-founder Ben Handler said the agency had made the decision after a flood of inquiries from first time buyers who have been unsuccessful in their purchasing attempts.
“With demand for property at record highs at the moment and interest rates at record lows, we are seeing first home buyers being priced out of the market every day by seasoned investors and foreign buyers,” Handler said
“We think it is so important for the future of Australia that first home buyers be given a reasonable opportunity to purchase property,”
Any savings, like the one offered by Cohen Handler, are likely to well received by first time buyers after statistics released by the Australian Bureau of Statistics last week revealed they are borrowing more than ever to finance their property purchases.
The home loan data from the ABS showed that on average first time buyers borrowed $340,200 in June, the highest number on record.
That figure is a 10.2% increase on the amount first time buyers were borrowing at the same time in 2014 and is a substantial increase on the amount being borrowed five years ago - $287,900.
First time buyers in NSW were borrowing the largest amount at $398,600.
AMP chief economist Shane Oliver told Fairfax Media that despite record low interest rates, current first time buyers were missing out on advantages those in the past received.
“As prices move up, people have to borrow more to buy their first home," Dr Oliver said.
"But what makes it harder is, in the olden days when we paid less for homes and interest rates were higher, we also had high inflation and wages were going up faster.
"So the burden of the high level of interest rates didn't last as long, because as wages went up suddenly [the larger] mortgages didn't seem like such a big number."
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