First Home Buyers

First home buyers urged to proceed with caution

PHOTO: Interest rates may be at a record low but experts say there’s more to consider if buying now. (ABC News: Michael Janda)

It’s a cold reality of Sydney’s white-hot property market and experts are warning it could land newly minted homeowners in trouble.

Buyers are being urged to not be swept away by the Harbour City’s housing surge that saw prices increase by 2.5 per cent last month – the equal highest level in the country.

It’s prompted a warning some people could be taking on more debt than they can handle.

Record low interest rates have led to a spike in lending, with a 71 per cent increase in loans to first home buyers since January last year.

At the same time, Australia’s property prices have recorded their sharpest increase since 2003, according to recent data from CoreLogic.

The Reserve Bank says it’s keeping an eye on financial institutions to ensure they’re not lending so much that people end up in mortgage stress.

READ MORE VIA ABC

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