First home buyers are slowly returning
Falling housing prices, combined with the increase in overall income levels and the recent stability shown by interest rates has sparked a return of first home buyers to the market. For the most part, 2005 represented a tepid year for first time home buyers, with little increase in market share from the record low seen in 2004. With a 3.4% drop of house prices in Australia’s capital cities, many first home buyers saw their chance to start building equity in a new home. While some are still cautious about committing to a mortgage loan, the re-emergence of solid numbers of first home buyers is a positive sign for the coming year.

Housing affordability rises while interest rates remain stable
Contrary to what some experts had predicted, housing affordability rose to its highest level in a year, increasing by 5.4 percent in the last quarter of 2005. Beyond attracting new buyers to the market, the decrease in regional home costs has put to rest the rumour that 2006 would see a continued rise in home pricing. While the full affect of the affordability level increase has yet to be explored, experts forecast that the stable interest rates and home prices will draw even more buyers into the market, prompting a strong housing market for the rest of 2006.

Good news for first time home buyers
The drop in housing prices represents good news for first home buyers who have been waiting for a break in the market to fulfil their dream of owning a home. Lower home prices translate to lower monthly mortgage payments, and more opportunities for families to get into a home of their own. 2006 seems to be gearing up for a strong year for first home buyers and the housing industry as a whole.