First home buyer finance commitments continue to trend downwards
Housing finance data for February 2016 was released today 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 fell sharply to 14.7% in February 2016 from 15.1% in January 2016. Even more concerning was the drop in comparison to February 2015 – the proportion of first home buyer finance commitments dropped from 16% to 14.7%.
(Source: Australian Bureau of Statistics – ABS)
As we can conclude from the above graph, first time buyer activity is showing a worrying trend of falling even further. The February figure is also the lowest since June 2004 when the percentage of first home buyer commitments fell to 14.3%.
On a more positive note, the average size of a First Home Buyer loan (nationally) continued to show an improvement. The average first home buyer loan size now stands at $327,500, these figures have been recording a steady decline since the record high recorded in October 2015 ($355,500).
First Home Buyers Australia (FHBA) Co-founder Taj Singh said “following on from last month, the February stats further emphasise the need for urgent reforms to assist a greater number of first home buyers get into the property market. We are still waiting to see what proposals the Liberal party announces after the Labor party announced their policies on negative gearing and CGT”.
Last year FHBA launched a 5 point plan to address housing affordability and assist aspiring first home buyers. The 5 point plan includes reducing investor tax incentives as well as providing more first home buyer assistance. To learn more about our 5 point plan, as well as show your support, please click here.
Fellow FHBA co-founder Daniel Cohen said “we will continue to lobby the Government in this election year for more assistance for first home buyers. We are also currently in the process of further explaining each of our points in our 5 point plan”.
To see how our first two recommendations may assist first home buyers, please see the below:
The source for the statistics in this article was the Australian Bureau of Statistics. Learn more here.