A DECLINE AS LOAN-TO-VALUE RATIO (LVR) RESTRICTIONS IMPACT THE FIRST HOME BUYER MARKET
Loan to value limits were introduced at the beginning of October by the Reserve Bank. All banks must now lend no more than 10% of their new home loans to people with deposits of less than 20%.
First national’s survey was released to the media on Friday, October 8. This reserch was commissioned by First national group to get an early indication of the impact since the loan to value ratio (LVR) retrictions came into force.
This survey revealed convincing evidence that the LVR implemented by the Resrve Bank is already impacting the number of first home buyer attendees at open homes. The report stated that “ther has been a vert noticeable drop off in first home buyers attending open homes. This buyer group isfrequently expressingtheir frustration at the new LVR rules, which most see as a government restriction. On average there are 27% less first home buyers attending open homes across the country.
The survey also found on average the number of unconditional contracts for first home buyers was halved last month compared to this time last year. While investor enquires has increased with LVR enhancing their position and options by reducing the number of first home buyers available to purchase.
Filed under: REAL ESTATE | Tagged: Real Estate