Average first home buyer loan size jumps as proportion of FHB’s stabilise

The housing finance data for June 2016 was released today (the 10th of August 2016) by the Australian Bureau of Statistics (ABS). The report showed that the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments stabilised to 14.3% from 14.2% in May 2016. However on a like-for-like basis (adjusting for seasonal factors) there is no improvement, as we have seen a large drop from 16% in June 2015 to 14.3% in June 2016.

First home buyer loan sizes jump

What could be of concern is the 4% monthly jump in the average national first home buyer loan size from $323,400 in May 2016 to $335,000 in June 2016. For an average first home buyer purchasing their first home with a 20% deposit, this means they are saving another $2,320 to meet their deposit needs.

FHBA co-founder Taj Singh expressed his concern “whilst the average loan size figures were showing an encouraging trend of dropping in the first half of the year, this jump shows first home buyers could be starting to stretch themselves again in order to achieve their goal of home ownership”.

See how your state has fared in our Nationwide analysis of the change in average first home buyer loan size from May 2016 to June 2016:

NSW – Up 2.5% from $380,100 to $389,700

VIC – Up 6.6% from $326,100 to $347,700

QLD – Up 2.4% from $288,100 to $295,100

SA – Up 1.6% from $264,600 to $268,800

WA – Down -0.4% from $314,000 to $312,900

TAS – Up 5.5% from $226,300 to $238,800

NT – Down -3.6% from $297,000 to $286,300

ACT – Down -1% from $334,900 to $331,500

The large jump in Victoria (6.6%) was a major driver of the increase in national average first home buyer loan size. This result is consistent with the figures released by the Real Estate Institute of Victoria, which showed just 7%  (23 postcodes) of Melbourne’s 312 postcodes were deemed affordable (with a median of below $400,000) for home buyers. This is down from the 12% at the same time last year.

Fellow FHBA co-founder Daniel Cohen said the state by state loan sizes continue to show how first home buyers in Victoria are stretching themselves to buy their first home. “The figure recorded in June was the second highest average loan figure on record for Victoria. Whereas, first home buyers in Tasmania & Queensland seem to be taking advantage of the greater first home owner incentives offered in their state”.

The news for WA and NT aspiring first home buyers is brighter, as their average first home buyer loan size is now 9% and 20% respectively, lower than June last year. This can be attributed to greater supply and softening local property market conditions.

Due to the increasing first home buyer loan sizes, it is critical for a first home buyer to ensure that their first home loan has attractive rates and features to help offset the increased loan size aspiring first home buyers are faced with. FHBA Mortgages, powered by Mortgage Australia Group, is a unique, complimentary and exclusive mortgage service for first home buyers. To determine your eligibility for your first home loan, please complete the short form below to arrange a complimentary, no obligation chat with an FHBA Broker:

 

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