Rising interest rates and unemployment has prompted the Opposition treasury spokesman Joe Hockey to warn that first home buyers could struggle to meet mortgage commitments. New Australian Bureau of Statistics figures show the value of new home loans fell 2.3 per cent in July compared with June, and first home buyer numbers are starting to drop back as house prices rise.

There were 18,400 first home buyers in the month of June, but 17, 170 in July, showing that demand for the grant is beginning to wane after record numbers have applied for it.
“The great risk for first home buyers next year is rising unemployment and rising interest rates at the same time, Mr Hockey told The Australian newspaper.

Late last year, the Federal Government stimulated the first home buyer sector with a boost which doubled the first home buyer grant to $14,000 and offered $21,000 for new homes. Many experts have warned the boost has merely inflated home prices rather than genuinely help first home buyers.

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