New Home Buyers Absent


FIRST home buyers have vanished with new figures revealing their participation in the market is at record lows.


According to figures from the Australian Bureau of Statistics first home buyers accounted for only 11.8 per cent of all home loans financed in August.


That means that during the month, loans were given to only 6,055 first home buyers.


First homebuyer numbers are at almost the same level as a decade ago (about 10,000 a year less) despite some capital cities experiencing more than double growth in median house prices and fewer government incentives.


There is a lot of different factors that are contributing to the lower levels of first home buyers compared to the past. You can see where there have been peaks of first home buyers and that is often around times of government incentives.


As many of those incentives have been wound back or disappeared, first home buyers found they had to save more money to get into the market. This is holding first home buyers back as it is costing them more to get into the property market than before. This coupled with rising house prices and increases to costs of living, meant many struggled to save enough for a deposit.

And predictions are it is about to get tougher.


Many first home buyers struggle to save a deposit. The latest Reserve Bank Survey, found all 28 leading experts and economists are tipping interest rates to start rising again next year. That predicts that will lead to a gradual rise to 4 per cent over the next two-three years.


That means home loan repayments for a $300,000 home loan is likely to increase by $300 per month. This is not looking great for first home buyers.


Another issue was that many first home buyers were not compromising enough on where they were prepared to live and in what type of property. They had to lower their expectations to enter the market.