First-Time Buyers Seize Opportunity in Cooling Property Market

The property market in Australia has seen a decline in new home loan applications since May, with some banks reporting falls of up to 20%. However, first-time home buyers are bucking this trend, taking advantage of lower property prices and the government's expanded 5% deposit scheme. According to Loan Market, these buyers are applying for more loans than they were in June, indicating growing confidence in the market.

Shay Waraker, a credit expert at Loan Market, attributes this shift to the tax changes announced in May's budget, which have taken some of the heat out of the market. Investors are hesitating due to these changes, leaving more opportunities for first-time buyers.

The Reserve Bank of Australia has introduced three rate rises this year, bringing the cash rate to 4.35%. While rates remained on hold at the last board meeting, lenders predict another rate rise later this year. Analytics firm Cotality predicts that the bottom of the current property downturn could be around May or June next year.