Housing sales up by 11pc as first home buyers return to the market - HOME and mortgage sales jumped 11 per cent in August as homebuyer confidence strengthened and mortgage delinquencies stabilised

While the Reserve Bank kept official interest rates on hold yesterday, home sales across the nation reached 6269 during August, 10.9 per cent higher than in July, as first home buyers continued to return to the market, according to the Australian Finance Group.

Australia's biggest mortgage broker said first home buyers' share of the mortgage market troughed at 9.5 per cent in June, before climbing to 11.1 per cent in July and 11.7 per cent in August.

The trend was strongest in NSW, with sales to first home buyers now making up 15.5 per cent of all sales in that state, up from 11.7 per cent in June.

Confidence among homebuyers is upbeat and is now above 2008 levels but has yet to surpass 2009 levels, lenders mortgage insurance provider Genworth Financial says.

The evidence on homebuyers' affordability is mixed, with Genworth's index of homebuyer confidence indicating 20 per cent of homebuyers expect to have repayment difficulties over the next 12 months.

However, global ratings agency Moody's Investors Service measured delinquency rates on prime mortgages and found they had stabilised at 1.39 per cent in the June quarter.

Moody's vice-president Arthur Karabatsos isolated two regions of the country as being at risk. Borrowers in outer southwest Sydney, and in the Sydney suburbs of Fairfield and Liverpool, had the highest level of delinquencies across Australia.

RBA governor Glenn Stevens said that interest rates were around their average levels of the past decade.

"Credit outstanding for housing has slowed a little over recent months, and the upward pressure on dwelling prices appears to have abated," he said in a statement yesterday.

Source: news.com.au