First home buyers deluge a housing market in drought of property investors and move up home buyers.

As investors and second and third home buyers stay away from property, by default the first home buyer share of the mortgage market has risen to a seven-year high in response to big rate cuts and generous grants to new home owners.
The Australian Bureau of Statistics (ABS) data also showed that overall home loan approvals rose for the second straight month in November while the popularity of fixed-rate loans dived to a record low.
The number of housing finance commitments for owner-occupiers rose 1.3 per cent in November, seasonally adjusted. In Queensland this was a negative number, so some States got a good bounce from the incentives put to first time home buyers.
This followed October's 1.4 per cent gain, which reversed eight consecutive monthly falls.
Commonwealth Bank senior economist Michael Workman said aggressive rate cuts and the Federal Government's boost to first-home buyer grants had restored housing sector confidence.
"It is indicating that the interest rate cuts and also the first home buyers scheme have had quite a strong impact on lending,'' Mr Workman said.
The Real Mortgage Picture is still bleak
On an annual basis, mortgage commitments have fallen by a quarter, with 49,192 mortgages taken up in November compared with 65,495 a year earlier.
In October, the Federal Government doubled the first-home buyer grant for established dwellings to $14,000, and tripled the subsidy for newly built homes to $21,000.
The housing finance take-up was likely to improve in coming months as borrowers responded to the increased first-home buyer grant and recent rate cuts, and put aside fears of unemployment.
New dwelling mortgage commitments climbed by a hefty 9.8 per cent in November, while established home lending rose by 1.1 per cent, the ABS data showed.
The mortgage market also boosted by the Reserve Bank of Australia's (RBA) decision to slash interest rates by one percentage point in October and by 75 basis points in November.
Interest rates were slashed again in December, by one percentage point, taking the cash rate to a six and a half year low of 4.25 per cent.
Expectations of more interest rate cuts appear to have affected the popularity of fixed-rate home loans, which fell to a 2.5 per cent market share in November - the lowest proportion since the ABS started collecting this data in 1991.
Whilst the rate cuts were enticing owner-occupiers and first home buyers, a recovery in the home building sector was still some way off.
Overall, confidence in the property market is still missing and job uncertainty is high.
The value of lending for investor housing fell by 6.1 per cent in November, while the number of loan commitments to build new dwellings dropped by 0.3 per cent.
NSW enjoyed a strong recovery in home loans during November, with the 5.8 per cent rise in housing finance for owner-occupiers reversing nine consecutive months of decline.
Only Tasmania had a bigger monthly increase of 6.5 per cent.
The story was different in the former commodities-boom state of Western Australia, where mortgage commitments fell by 5.8 per cent in November.
The ACT had the steepest monthly fall of 13.8 per cent.

Citigroup Sells Crowns Jewels and sheds workers after Subprime fallout

The once mighty Citigroup hopes to sell a majority stake in Smith Barney, the brokerage firm, to Morgan Stanley in a deal that would create the world's biggest wealth manager.
The negotiations came to light as Robert Rubin, the former US Treasury Secretary, resigned as senior counsellor and director of Citigroup after months of criticism for his role in leading what was once the world’s largest bank to the brink of collapse.
Under the deal being discussed by Morgan Stanley and Citigroup, 51 per cent of Smith Barney will be sold to Morgan Stanley with an option to buy the rest of the business within five years.
Morgan Stanley declined to comment on the talks and Citigroup did not respond to requests for comment.
It was not clear how much the deal would cost Morgan Stanley.
The banks are expected to work through the weekend to finalise the terms of the deal. The merger would help Morgan Stanley, which converted to a bank holding company last year and subsequently received $US10 billion ($14 billion) in Government aid, to diversify.
Citigroup, which has taken $US45 billion in government funding, is likely to welcome the additional capital that the deal would provide. The move is also in line with the strategy of Vikram Pandit, the Citigroup chief executive, to downsize the business after the sub-prime debacle. Citigroup is dismissing 52,000 of its workers after it made $US20 billion in credit-related losses.
The bank also announced the resignation of Mr Rubin, who was Treasury Secretary from 1995 to 1999. In a letter to Mr Pandit, Mr Rubin said:

My great regret is that I and so many of us who have been involved in this
industry for so long did not recognise the serious possibility of the extreme
circumstances that the financial system faces today.

Mr Rubin, who joined Citigroup in 1999, has been excoriated in the media as the force behind the bank’s decision to chase profits by pushing into risky credit-related products. His duties at the bank, other than using his network to attract clients, were not clear, but insiders said that his influence was pervasive.
In his time at Citigroup, Mr Rubin collected about $US150 million in remuneration.
Before becoming Treasury Secretary, Mr Rubin, who is a graduate of Harvard and Yale Law School, had a long career at Goldman Sachs, where he started on the arbitrage trading desk and worked his way up to become co-chairman of the elite bank.
Shares in Citigroup closed in New York at $US6.75, down by 5.7 per cent.