The downward spiral in first home buyer numbers continues
Housing finance data for March 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 14.2% in March 2016 from 14.6% in February 2016. The greater concern is the year on year drop from March 2015 – the proportion of first home buyer finance commitments dropped from 15.4% to 14.2%.
(Source: Australian Bureau of Statistics – ABS)
As mentioned in our media release last month, the trend has confirmed our worries about the trajectory of the number of first home buyers. Since September 2014, which coincides with the beginning of the latest property boom, the graph shows a sharp decline in first home buyer activity. The March figure is also the lowest since May 2004 when the percentage of first home buyer commitments fell to 14.1%.
First Home Buyers Australia (FHBA) Co-founder Taj Singh said “following on from last month, the March stats further emphasise the need for urgent reforms to assist a greater number of first home buyers get into the property market. With the Liberal party ignoring first home buyers in the budget and upcoming election campaign, we can expect more pain for aspiring first home buyers if the current Government is re-elected, we hope our Open letter to the Turnbull Government forces a change in thinking”. To view our open letter click here.
Housing affordability has been a issue of debate over the last few years, however it is not a debatable issue anymore, 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. To solidify this argument, as per the Annual Demographia International Housing Affordability Survey: 2016 (12th Edition) it showed that Australia had a severely unaffordable major market Median Multiple (Median House Price / Median Household Income) of 6.4 in 2015. It has been ranked severely unaffordable over the few years, of greater concern is the 2.4 median multiple point increase in one year alone. As per the graph below all 5 of Australia’s major cities – Sydney, Melbourne, Perth, Brisbane & Adelaide are now considered severely affordable (any median multiple over 5 is considered severely unaffordable).
(Source: Demographia Housing Affordability Survey)
The source for the statistics in this article was the Australian Bureau of Statistics. Learn more here.
The source for the statistics in this article was the Demographia. Learn more here.