House price falls may spur first home buyers

Friday, 13 Jul 2012

Demand from first time buyers has the potential to spike, as figures show that Australian property prices are continuing to struggle.

During the June quarter, house prices across the country declined by two per cent, with Victoria posting the biggest falls in NAB's Residential Property Index.

New South Wales saw the second-biggest declines, while the market was strongest in Western Australia.

Queensland experienced price falls of 1.7 per cent, as South Australia and the Northern Territory both saw a 1.6 per cent decline.

In the second quarter, first home buyers and resident investors were especially active, as demand for inner city housing increased alongside low-rise apartments and townhouses.

A recent survey from Loan Market found that some first-time buyers are holding off purchasing a property in the hope that the cash rate will be reduced further.

"While consumers and home owners are always looking for interest rate relief, the latest round of cuts has yet to influence the cautious and subdued mindset of Australian," acknowledged corporate spokesperson Paul Smith.

He added that the economy needs to undergo a number of changes to make sure some ailing sectors receive the support they need to ride out the financial storm.