First home buyer loan demand has plummeted in NSW and Queensland, according to new AFG figures released this week.
In November, AFG arranged just 96 home loans, worth $31 million, for first home buyers in Queensland – compared with 265 mortgages worth $79 million in October. NSW followed suit, with both October and November throwing up less than half the 219 home loans, worth $83 million, arranged in September.
AFG says the proportion of home loans arranged for first home buyers has slumped in Queensland from levels around 15% in the months leading up to the end of the first home buyers grant, down to 5.5%.
In NSW, first home buyers comprised 13% of new home loans up to September, falling to 5.7% in October and 5.4% in November.
AFG general manager of sales and operations, Mark Hewitt, says the trend is significant – and highly concerning – for the market going forward.
“First homebuyers are the lifeblood of the property market – when activity stagnates at the entry level, it affects everyone up the property chain.”
By contrast, he says, both NSW and Queensland are currently seeing a strong support among property investors.
“We could be seeing the transition to a generation of renters unless more is done to help people onto the property ladder.”
WA leads the country in the first homebuyers market, with 23.6% of all home loans arranged.
AFG also reports an increase in the proportion of fixed rate mortgages, which comprised 21.6% of all home loans arranged in November.