Three quarters of those 'eligible' for First Home Owners Grant unaware of Sept 30 significance

21 September 2009

The NAB First Home Buyers survey released today revealed over two thirds of respondents (67%) looking to buy their first property expect to have help from the Government First Home Owner Grant (GFHOG). However when those who believed themselves to be eligible for the grant were asked about the significance of September 30 only a quarter correctly identified the reduction to the First Home Owner Boost (FHOB).

With half of those eligible for the GFHOG saying the boost had provided them with extra motivation to buy their first property, it is not surprising the survey also revealed 48% of existing property owners believe that prices of properties under $500,000 will fall when the FHOB ends.

NAB Personal Banking's General Manager of Mortgages, Steven Shaw said the increased government assistance had helped many first homebuyers enter the property market, however this survey showed some confusion still remained amongst this segment.

"The monetary assistance provided by the government has helped enable many first home buyers to enter the property market over the last year. However our research has uncovered a level of uncertainty amongst many potential first home buyers about what amount of support is available and what type of loan would be best suited to them."

When questioned about the type of home loan they would currently choose, 16% of those respondents eligible for the FHOG admitted they did not know. 32% opted for fixed rate loans, 20% for variable and 31% for a split loan, which is part fixed and part variable.

Mr Shaw added it's important that first home buyers get the right guidance and realise that finding the right mortgage requires more than just financial assistance.

"For any customer, whether they are a first home buyer or not, fixed loans offer a level of security in knowing exactly how much they will be paying for the fixed term. For this first home buying segment, a mixture of a fixed and variable loan would provide both that level of stability and security, while also allowing flexibility.

"NAB's home loan experts provide information and tools to help potential home buyers make an informed decision about the home loan that is right for them," Mr Shaw said.

Other findings from the survey include:

  • 23% had help from parents or another source in raising a deposit for their home loan for their first property
  • 7% had help from parents in terms of providing security for the loan in buying their first home
  • A quarter of respondents are looking to buy their first property by themselves (i.e. without a partner)
  • Over half (55%) of those surveyed are looking to buy their first property with a partner
  • 59% of those looking to buy a first property are looking for a house, 21% a unit
  • 65% of couples who are planning to purchase together intend on contributing equal amounts
  • If taking out a home loan today, Australian home buyers are more likely to opt for a variable or split home loan (66%) over a fixed rate loan (24%)

About NAB:
NAB is committed to responsible lending practices and acknowledge their obligation to market their products and perform duties responsibly to stay abreast of the expectations of customers and the community.

Strict and sensible criteria is applied to borrowing to ensure that affordable amounts are lent to customers. First and foremost, NAB only seeks to lend money to those customers with the ability to repay ensuring their products are marketed responsibly and provide additional assistance to those customers with financial literacy constraints. Responsible lending is part of NAB’s code of conduct and customer charter.

About NAB Home Loans:
A NAB home loan expert can help customers choose a home loan with options that are right for them. And with CANSTAR CANNEX awarding more NAB home loans their 5 star outstanding value award than any other bank * there are a wide range of home loans to choose from with competitive rates and great features.

* As rated by CANSTAR CANNEX, March 2009, ratings reviewed every 6 months.

About the NAB First Home Buyers Survey:
The Galaxy Research study was conducted online among members of a permissionbased panel with a sample of 1279 respondents aged 18 years and older. The survey was distributed throughout Australia during August 2009. Following the completion of interviewing, the data was weighted by age, gender and region to reflect the latest Australian Bureau of Statistics population estimates.

For further information, please contact:
Bree Pollock
Bang PR
M: +61 (0) 414 332 002

Gillian Griffiths
NAB Corporate Affairs
M: +61 (0) 419 667 783