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Yesterday’s Australian Bureau of Statistics (ABS) release of housing finance data shows that first home buyers are being left behind in the housing market, according to Australians for Affordable Housing (AAH).
ABS figures show that, in original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell to 14.9% in December, 2012, down from 15.8% in November, 2012.
The months leading into the end of 2012 saw a notable decline in the proportion of first home buyers, compared to other home sales.
In an interview with Australian Broker, Real Estate Institute of Australia (REIA) president, Peter Bushby, says it’s important to stimulate the building market, but says he’s worried the government is putting too much emphasis on that area.
“We believe that they should be looking at doing more. In some states, there’s been a focus on just moving to new construction and we have issues with that because not every buyer wishes to build a new home…We agree with stimulating the building industry, but more needs to be done. First home buyers as a portion of the market have dropped and that’s a serious concern.”
#pb# Bushby says the number of first home buyers, as a percentage of total owner occupied housing commitments, decreased to 14.9% in December 2012 and says this figure is the lowest since 2004.
Joel Pringle, campaign manager for AAH, says recent falls in interest rates seem to have benefited investors, but have left first home buyers cold.
“In spite of low interest rates, the struggles of potential first home buyers can be seen across the country and are part of a worrying trend. The proportion of first home buyers has collapsed from 21.1% in December 2011 to 14.9% in December 2012.”
Pringle says the drop in the proportion of first home buyers comes as average first home loans, and average home loans overall, are again increasing and warns that increasing house prices will provide further affordability challenges, should they continue.”
“The drop in first home buyers was most pronounced in NSW, likely as a result of the withdrawal of first home buyers’ grants. In the longer term, these grants simply push up prices, so we’ll be watching the longer term effects of this policy change.”
He says governments are continuing to ‘ignore’ the problem and says it’s getting harder for young families to buy their first home.
“It’s a shame that we are in an election year, but neither the government nor the opposition has offered anything other than the status quo. House prices will continue to run away from people’s ability to pay.”
