First home buyer activity down

First-home-buyer-activity-declined-in-December-_157_6004000_0_14074535_300Although demand for New South Wales property continues to blossom, the latest data from the Australian Bureau of Statistics (ABS) reveals that there is one group that is falling behind – first home buyers. The figures show that lending activity amongst this segment has sunk to a 10-year low, despite an investigation into how first home buyer data is collected.

In a 4 February statement, the ABS announced they would revise estimates of loans to first home buyers by up to 20 per cent. The investigation revealed that many lenders were not including figures for first home buyers who did not receive first home owner grants in their reporting, causing home buyers and investors across the country to breathe a sigh of relief.

This latest data shows that despite the revised estimate, first home buyers’ share of new loans fell 0.1 percentage points to 14.5 per cent in December. CEO of the Real Estate Institute of Australia, Amanda Lynch, said this confirms concerns that this group is gradually withdrawing from the housing market.

“The figures shows first home buyer levels stand at 14.5 percent for December. While the revisions have increased the proportion of first home buyers by around 2 percentage points, the figure is the lowest since May 2004 and shows a steady decline since May 2012,” she said.

Meanwhile, investor demand is continuing to move from strength to strength. Investor lending now accounts for around 41 per cent of all home loan activity, up 6 per cent over the last month of 2014. Expanding demand in this segment could explain the concerning drop in first home buyer loans. Property prices in Sydney in particular reflect an appetite for multi-unit property while burgeoning house prices are pushing home ownership beyond the reach of many buyers.

These latest figures will only add to speculation of further rate cuts in coming months, something that is likely to boost first time buyer confidence. Fortunately, if you’re a buyer looking to get a foot in the NSW market, or an old hand in property management, your local real estate agent can advise you on the best available options.

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