'Lifeblood' draining from property market: AFG

by Mackenzie McCarty04 Dec 2012

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.



  • by Sean Sydney 4/12/2012 9:57:32 AM

    As a prospective first home buyer I was extremely disappointed when they took away the FHOG in NSW. Paying rent and saving is not easy to do in Sydney when the option to move home isn't available and saving the extra $7k+ will take a little while. To only apply it to people wanting to build their first home is ridiculous and really limits where people can buy if they want to live closer to the city, as land is scarce and very expensive to say the least! Bring back FHOG!