Property unaffordable for first homebuyers

The number of first homebuyers in the December quarter was at its lowest since the Australian Bureau of Statistics started to collect data, according to the Real Estate Institute of Australia (REIA).

President of the REIA, Peter Bushby, says the figures reveal that first time buyers believe property is too expensive.

“The latest Adelaide Bank/REIA Housing Affordability Report shows that first homebuyers made up only 12.5 per cent of the owner-occupier market compared to 13.6 per cent in the previous quarter,” he says.

“The report also shows the proportion of income required to meet loan repayments increased one percentage point over the quarter to 30.8 per cent.”

Bushby believes changes to state-run first homebuyer grants are having a direct impact on the market sector.

He says in Victoria, for example, shifting grants away from first homebuyer preferred existing dwellings has resulted in a fall of 5.4 per cent for the year in new purchasers.

“There’s anecdotal evidence that younger Australians are opting for living in rental accommodation or with their parents longer and investing in property rather than becoming first homebuyers.”

Bushby says the drop in affordability has been wide spread with all states and territories recording a downturn, apart from the Northern Territory.

Adelaide Bank general manager, Damian Percy, says more needs to be done for the sector.

“In spite of a benign interest rate environment, a historically low number of Australians don’t feel they’re in a position to step onto the first rung of the property ladder and this isn’t a good thing,” he says.

Article can be found at: http://apimagazine.com.au/api-online/news/2014/02/property-unaffordable-for-first-homebuyers