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First Home Buyers Find Housing is Not Affordable

5 Mar 14

The Real Estate Institute of Australia (REIA) says that in the December quarter of 2013, the number of first home buyers was the lowest since the Australian Bureau of Statistics started to collect data and is also persistently low compared to the long-run average despite eight interest rate cuts since November 2011.

REIA President Peter Bushby says, “The latest Adelaide Bank/REIA Housing Affordability Report shows that first home buyers made up only 12.5% of the owner-occupier market compared to 13.6% in the previous quarter.”

“Following the changes to the First Home Owner Grant introduced by the Victorian government, which skew assistance away from existing dwellings (the clear preference of first home buyers), that state continued to show a fall in the number of first home buyers, down by 22.7% over the quarter and 28.1% for the year.”

“The report also shows the proportion of income required to meet loan repayments increased 1.0 percentage point over the quarter to 30.8%.”

“With the exception of the Northern Territory, all states and territories recorded downturns in affordability however, compared to the same quarter of 2012, affordability improved over the longer term with the proportion dropping by 1.8 percentage points.”

“The ACT remained the most affordable state or territory in which to buy a home, largely due to the high average income and NSW remained the least affordable.”

“Rental affordability improved in Victoria, Queensland, South Australia, Western Australia, the Northern Territory and the ACT but worsened in NSW and Tasmania with the proportion of median income required to meet average rent rising 0.3 and 0.9 percentage points respectively,” concluded Mr Bushby.

The report is available for members by clicking here.