The number of first home buyers turning to their parents or other family members to guarantee their home loan is on the rise, a new survey has revealed, as increasing house prices continue to lock them out of the market.
According to
NAB, the proportion of first home buyers signing up for loans with the bank who have the backing of a family member has lifted to 6.7% from 4.8% in 2010,
Fairfax reports.
NAB's executive general manager for consumer lending, Angus Gilfillan, told
Fairfax that increasing price pressure and vigorous competition from investors has led to a rise in guarantor home loans for first home buyers.
“It's getting a lot tougher for first home buyers to enter the market. The rise in house prices has been pretty well-documented, particularly in Melbourne and Sydney, where prices have increased by circa 50 per cent since 2008,” he said.
“All of this means that first home buyers need a larger deposit and we're seeing that first home buyers are, effectively, being crowded out of the market.”
The proportion of first home buyers in the home loan market lifted from a ten-year low of 13.6% in January to 13.7% in February, according to the latest housing finance figures released by the Australian Bureau of Statistics. However, first home buyer loans remain well below the long-term average of 19.8%.
