First home buyer numbers remain low

	Readers should not act solely on the material contained in this newsletter. The material contained herein is general comment only and not intended as advice on any particular matter. All information is believed to be accurate, but no warranties or guarantees are given by the publisher, editor or authors.
Print This Page

First home buyer numbers remain low - Housing Industry Association

10 December 2003

First home buyer numbers remain low For first home buyers, the downward spiral in housing affordability has resulted in the proportion of first home buyer loans remaining at an all time record low in October, as was the case in September.

Figures released today show that in October 2003, 8,046 loans were issued to first home buyers. This number is lower than the average number of first home buyer loans over the twelve year history of the series, and significantly lower than the average number of loans, 10,045, seen since mid–2000. First home buyer loans represent 13.4 per cent of the total, down from a peak of 25.8 per cent in July 2001.

Australia’s peak building industry body, the Housing Industry Association, said that despite the ongoing incentive of the $7,000 first home buyers grant, the combination of acute land supply shortages, stamp duty, fees, taxes, charges and GST has sent home prices out of the reach of many first home buyers.

HIA’s Senior Economist, Mr Harley Dale, said that today’s figures provide a clear indication of the difficulty faced by first home buyers in entering the housing market.

"The number of first home buyers is significantly lower than the peak reached in August 2001 where 14,156 loans were issued," Mr Dale said.

"The October numbers of course pre-date the two 0.25 per cent interest rate rises seen in November and December, and the proportion of first home buyers may indeed hit fresh lows in the final two months of 2003," Mr Dale said.

"In addition, what the overall housing finance figures (down a slight 0.3 per cent in October) don’t yet capture is that the two rate rises have already had an immediate effect, in particular on auction clearance rates, display home traffic, and deposits on new homes," Mr Dale said.

For all lending, very modest rises were recorded in South Australia (up 2.3 per cent), New South Wales (up 0.9 per cent), and Western Australia (up 0.7 per cent). Lending was flat in the Northern Territory. Total lending fell in the ACT (down 3.4 per cent), Tasmania (down 3.3 per cent), Queensland (down 1.5 per cent), and Victoria (down 0.9 per cent).

Real Estate in Adelaide, South Australia