The buyers buying during the housing market downturn

AS buyer and seller activities soften amid the national housing market downturn, figures show just how first homebuyers, investors and subsequent buyers are reacting.

According to CoreLogic data, owner-occupier demand for housing finance in a rising rate environment by subsequent buyers appears to be fairly resilient.

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Defined as upgraders, movers and downsizers, this could be because subsequent buyers are likely to use the sale of an existing property to purchase a new one meaning they require less debt than first homebuyers.

Because the property downturn is predominately the result of higher mortgage rates impacting housing affordability (in terms of paying off a mortgage), data shows housing finance by first homebuyers group has declined.

First homebuyer activity may increase moving forward during the decline if there are any new incentives or special new grants introduced during the downswing.

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Finance demand by investors has also declined but CoreLogic expects demand for finance by investors will pick up when price declines flatten out and there is more certainty around mortgage rates because rental conditions remain strong with gross rental yields trending higher making the rental market conditions.

Meanwhile, subsequent buyers are expected to continue to dominate finance demand and the purchasing market but as long as interest rates keep rising, CoreLogic expects to see a gradual decline in activity by subsequent buyers.

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Are you a first homebuyer, investor or subsequent buyer? At Baileux, we can help you find the right property for your budget. Contact our team today to discuss your property needs.

Benjamin Molineux
Principal and licensee
Baileux Real Estate