Average first home buyer loans increase 50% in a decade

Housing finance data for April 2016 was released on Wednesday 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 steadied to 14.4% in April 2016 from 14.2% in March 2016. Of greater concern is the year on year drop from April 2015 – whereby the proportion of first home buyer finance commitments dropped from 15.6% to 14.4%.

Apr 2016 Housing Finance Graph UPDATED

(Source: Australian Bureau of Statistics – ABS)

Many experts argue that the housing affordability issue is something of greater concern in Australia’s largest cities only (i.e. Melbourne & Sydney). However, the graph above show’s housing affordability is increasingly a national issue said FHBA co-founder Daniel Cohen.

“The graph shows the increasing amounts first home buyers are borrowing in order to purchase their first home. These increases are also significantly higher than the wage growth over the past 10 years” said Daniel.

From the graph we calculated the following percentage increases by state loan sizes between April 2006 to April 2016 (using a year on year method for the month of April):

  • NSW: The average loan size increased 51% from $258,700 in April 2006 to $391,900 in April 2016
  • VIC: The average loan size increased 58% from $209,900 in April 2006 to $331,500 in April 2016
  • QLD: The average loan size increased 36% from $214,500 in April 2006 to $290,800 in April 2016
  • SA: The average loan size increased 56% from $173,500 in April 2006 to $271,400 in April 2016
  • WA: The average loan size increased 62% from $197,000 in April 2006 to $321,100 in April 2016
  • TAS: The average loan size increased 41% from $165,400 in April 2006 to $233,900 in April 2016
  • NT: The average loan size increased 66% from $187,900 in April 2006 to $312,300 in April 2016
  • ACT: The average loan size increased 38% from $236,600 in April 2006 to $326,400 in April 2016
  • Australian Average: During the same period the national average first home buyer loan has increased 50% from $221,100 to $330,600

In addition to the fact that first home buyers are having to borrow higher amounts, the % of first home buyers borrowing to purchase their first home is diminishing to the lowest levels on record as they struggle to compete with other buyers, especially investors who are aided by record low borrowing rates and generous tax incentives, such as negative gearing.

NSW 13 AprSearch for FHOG eligible properties now

“As mentioned in our media release last month, housing affordability has been a issue of debate over the last few years, however it is not a debatable issue anymore” said FHBA co-founder Taj Singh. “It is something that is happening now and needs urgent attention otherwise the Great Australian Dream of home ownership is going to be out of reach for many young Australians”.

With the Liberal party ignoring first home buyers in this year’s budget and during the election campaign thus far, we can expect more pain for aspiring first home buyers if the current Government is re-elected. We hope our recent open letter to the Turnbull Government forces a change in thinking. To view our open letter click here.

Compare the latest home loan interest rates on our home loan comparison page.



First Home Buyers Australia
First Home Buyers Australia

Australia’s leading organisation specialising in assisting first home buyers achieve the great Australian dream of property ownership.