With the number of first home buyers pushed down to record lows by increasing loan sizes, the head of one local bank has likened them to an endangered species.
“The number of first home buyers for the [September] quarter has dwindled to a figure now equivalent to the number of lions believed to be left in the wild,” said Damian Percy, general manager of Adelaide Bank.
Percy pointed to figures from the Real Estate Institute of Australia (REIA) Housing Affordability Report which showed that the number of first home buyers decreased by 6.7% to 21,825 during the September quarter.
“First home buyers now make up 13.2% of the owner-occupier market with all states and territories recording decreases in first home buyers over the September quarter 2016, excepting Queensland and the Northern Territory,” Percy said.
“This is the lowest figure since the ABS series was commenced in June 1991 and compares to an average of 18.5 per cent over the period”.
Also during the September quarter, the proportion of median family income required to meet average loan repayments rose by 0.1 percentage points to 29.5%.
“Unfortunately, historically low interest rates were unable to offset the increasing size of mortgages resulting in the rise in the proportion of the median family income required to meet average monthly loan repayments,” said REIA president Neville Sanders.
While NSW remained the least affordable state for home buyers in the September quarter, affordability improved in Victoria, South Australia, the Northern Territory and the Australian Capital Territory.
Tasmania had the smallest average loan size while the proportion of first home buyers on the owner-occupier market was largest in Western Australia.
“The [ABS] has recently revised its housing finance survey with the changes affecting statistics on owner-occupied and investment housing, the number of first home buyers and housing loan outstanding to households,” Sanders said.
It was “extremely disappointing” that the revised figures showed fewer first home buyers since 2012 than previously reported, he added.
“With the average loan sizes continuing to rise, REIA is concerned that the proportion may fall even further in the coming quarters.”
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