First home buyers still struggling, despite affordability remaining stable

by Julia Corderoy04 Sep 2014
Housing affordability across Australia remained relatively steady in the June quarter, however first home buyers are still falling behind.

According to the Adelaide Bank/REIA Housing Affordability Report, the proportion of income required to meet loan repayments only increased slightly by 0.3 percentage points – an encouraging national result for home owners. 

New South Wales remains the least affordable state for purchasing a home, with the proportion of income required to meet loan repayments 4.4 percentage points above the national average of 30.9%. The Australian Capital Territory is the most affordable state for home owners, with the proportion of income required to meet loan repayments sitting well below the national average, at 19.8% in the June quarter.

Despite the encouraging national outlook on housing affordability, first home buyers are still finding it difficult to land on their feet in the Australian property market.

The report reveals that the number of    new finance commitments to first home buyers increased 10.4% in the June quarter, but when compared with the same period last year, first home buying activity dropped 10.5%. 

The average loan size to first home buyers increased 0.7% over the June quarter and by 5.3% compared to the same time last year, to $304,467.

The amount of first home buyers making up the owner-occupier market dropped to 12.7%, remaining persistently low compared to the long-run average proportion of 19.7%.

Tasmania recorded the largest increase in loans to first home buyers in the June quarter, while Victoria suffered the largest decrease in the number of loans to first home buyers over the quarter. However, first home buyers in New South Wales made up the lowest percentage of the owner-occupier market across the country.



  • by Melb Broker / Ex Agent 4/09/2014 11:04:39 AM

    First home buyers will always continue to struggle with the huge gaps there is now between property values and wages.... 30 years ago the average annual salary was around $15,000p.p & the average home in a good area of Melbourne was anywhere between $30,000 - $40,000....Today average annual wages are around $60,000p.p & average median price home is around $550,000.....the gaps just too far for most to make.

    I would encourage more & more first home buyers to team up with Siblings to get there foot in the door and start somewhere and pay off your own mortgage rather than a shared rental house scenario and paying off anothers.