The latest housing data from the Australian Bureau of Statistics reveals that first home buyer activity in the market is low, with first timers making up less than 12% out of all home loans financed in August. But foreign buyers aren’t to blame.
A combination of challenging conditions is impacting the number of first home buyers in the market, including the removal or tightening of some first home buyer grant and incentive schemes, and rising median home values that in some areas, have outpaced income and costs of living.
A combination of challenging conditions is impacting the number of first home buyers in the market.
First home buyer home loans in the year to August 2014 are close to the same level as the same period in 2004 (77,881, compared to 87,577 a decade earlier).
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NAB Chief Economist Alan Oster says that headlines pointing to international buyers of property crowding out would-be local first-timers are misleading. He says local investors are applying more pressure to the market than foreign buyers, who tend to buy newer and more expensive property, such as high end apartments.
Local investors are applying more pressure to the market than foreign buyers.
Additionally, the ABS is cautioning that first home buyer figures may be under-reported, as it only takes into account financing with first home buyer grants.
Money expert and realestate.com.au contributor Michelle Hutchison said some first home buyers are not being realistic about what they can afford, and are stretching themselves and their budgets into risky territory.
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