Eight in 10 FHBs say housing is unaffordable

by AB12 Nov 2015
More than eight in 10 first home buyers planning to get onto the property ladder within the next two years believe housing is unaffordable in their state.

According to Mortgage Choice’s annual First Home Buyer Survey, 80.6% of those purchasing property for the first time consider housing to be ‘unaffordable’. 

However, Mortgage Choice chief executive officer John Flavell said the issue of unaffordable housing was more predominant in certain states. 

“The percentage of first home buyers who consider housing to be unaffordable is significantly higher in New South Wales and Victoria than it is in Queensland and South Australia,” he said.

First home buyers in New South Wales were the most disillusioned about property prices, with 86.9% of respondents stating housing was unaffordable in their state. Victoria was next with 85.7% of first time buyers saying property was too pricey. 

South Australia and Queensland had the smallest percentage of discouraged first home buyers with 76.8% and 75.4% respectively stating housing was unaffordable in their state, however, this is still more than three quarters of first home buyers.

Data from the Australian Bureau of Statistics reveals that the average home loan has grown almost four times faster than the average Australian full-time wage in the last two years. 

According to the data, the average home loan grew by 18.5% in the two years to April 2015 – from $301,800 to $357,500. Meanwhile, the average Australian full time wage grew just 3.6% from $77,225 to $80,054.

As a result, Flavell says the average home loan size in Australia is now approximately 4.5 times larger than the average wage – up 25% in the last two years. By comparison, the average loan size was 3.9 times the average full-time Australian wage in 2013. 

“These statistics are worrying as they clearly show wages aren’t keep up with property prices,” Flavell said.

Flavell is now urging the government to act to reduce the hurt for first home buyers. 

“Our data shows the majority of potential first home buyers would like to see the government re-introduce a grant for established properties,” he said. 

“While the various states currently have first home buyer grants in place for those who purchase a newly built property, nothing is given to those buying established properties, which is approximately 80% of all first time buyers.”

According to the survey, 42.5% of respondents said they would like to see the government introduce a first home owner grant for established properties, while a further 30.6% would like to see the government remove stamp duty for first time buyers.