The 2016 Outlook is not Rosy for First Home Buyers
P2C News - Monthly update for families building wealth 9 February 2016

First home buyers, already struggling to get onto the property ladder will be disheartened by results from a Reserve Bank Survey conducted by Finder, one of Australia’s biggest comparison websites. With 37 experts on the panel, the survey has found that a rise in property prices is largely expected to continue.

Of those surveyed, 69% expected the price gains to continue, which means that the prospects for struggling first home buyers is not looking to get any better. Fourteen per cent expected property prices to stabilise and 17% expected prices to fall.

The survey shows that most of the experts believe property prices will continue to rise. A 64% majority also believe that the level of first home buyers active in the market will remain similar to 2014.

National median property price across the capital cities hit $545,000 in October 2014. That is 8.9% higher than the previous year. With the growth in values it is putting the target of home ownership out of the reach of many first home buyers.

According to Chris Andrews, Chief Investment Officer at La Trobe Financial, “at least one third of first home applicants are currently being assisted by parents and grandparents”. With potential interest rate rises in 2016 that number can only grow. For that reason, La Trobe Financial introduced the innovative Parent-to-Child (P2CTM) Mortgage in 2014. Parents can help their children achieve their property ownership dream, and importantly their investment is properly protected against potential loss of the parents’ property. It’s really a wealth management credit product that is designed to protect families with their intergenerational wealth planning.

Best regards,

Martin Barry
Vice President,
Chief Wealth Management Officer

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La Trobe Financial is one of Australia's leading independent credit specialist Fund Managers. Its business includes residential mortgages, commercial mortgages, and investment services operating one of Australia's largest Credit Funds under AFSL 222213. It employs over 150 staff and has managed over AUD$10 Billion covering over 100,000 investment grade assets since inception in 1952.

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La Trobe Financial Services Pty Limited - Australian Credit Licence Number: 392385
La Trobe Financial Asset Management Limited - Australian Credit Licence Number: 222213

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