First-home buyer numbers down nationwide, except in NT

The Northern Territory is the only state or territory to record an increase in first home buyers in the March quarter, bucking a nationwide trend.

ACT had the biggest drop in this sector of the market, and South Australia first-home buyer numbers fell to a 20-year low.

In the Northern Territory the number of new loans to first-home buyers increased during the quarter, up 8.9% to 159 loans. These borrowers make up 23.5% of the market, according to the Real Estate Institute of Australia Deposit Power Housing Affordability Report.

At the other end of the scale, ACT recorded the largest decrease in the number of new loans to first-home buyers, down 25.5% to 324. First-home buyers still comprise 25.9% of the market in Australian Capital Territory.

State-by-state analysis

In New South Wales, the number of loans to first-home buyers continues to be higher than all other states and territories, despite a decrease of 14.6% to 6,097 from the previous quarter. Over the year, the number of loans to first-home buyers decreased 13%.

In Victoria, the total number of loans issued to first-home buyers decreased 21.1%, down from 7,005 in the previous quarter to 5,526, the second-largest decrease of any state or territory during the quarter.

In Queensland, first-home buyer numbers dropped 16.1% to 3,636 during the March quarter. Compared with the same quarter of 2010, housing loans allocated to first-home buyers decreased 17.6%

In South Australia the number of loans to first-home buyers declined 14.8% to 1,269, the lowest quarterly level since September 1991. Compared with the same quarter of 2010, housing loans to first-home buyers decreased 22.6% in SA.

In Western Australia the number of housing loans to first-home buyers declined 10.2% to 2,920. Over the twelve months to March 2011 the number of loans to first home buyers declined 18.3%.

The number of new loans to first-home buyers decreased by 8.3% in Tasmania, bringing the total number of new loans from 374 in the December 2010 quarter to 343 in the March 2011 quarter. Over the 12 months to March, the number of new loans to first-home buyers decreased 23.1%. 

 


 

Nationwide, the number of first-home buyers participating in the mortgage market plummeted to the lowest level in 17, years according to the latest Real Estate Institute of Australia Deposit Power Housing Affordability Report.


First-home buyers comprised just 15.4% of the “dwelling finance” market in the March 2011 quarter, compared with 15.6% in the December 2010 quarter, the latest report says. This is well below the long-term average of 20%.

The number of new finance commitments to first-home buyers fell to 16.1% for the quarter to 20,274, and the number of loans to first home buyers declined over the year, down 20.6%.

Affordability

ACT remains the most affordable state or territory, according to the report, with the proportion of income required to meet loan repayments increasing to 18.6%, 15.6 percentage points below the national average of 34.2%. NSW remains the least affordable, with the proportion of income required to meet loan repayments decreasing to 37.2%.Victoria is the second least affordable state (27.8%).

Affordability in Queensland improved during the quarter, with the proportion of income required to meet loan repayments decreased 0.5% to 32.9%.

During the March 2011 quarter, the total number of new finance commitments (excluding refinancing) decreased 16.5% to 90,157 – the lowest quarterly level in 12 years. All states and territories recorded declines in the total number of new finance commitments, both over the quarter and the year.

The latest finding about first-home buyer reluctance comes despite a report by Canstar Cannex saying conditions are easing for this sector of the market.

The financial data provider expects first-home buyers to be the likely beneficiaries of a flat housing market combined with an easing of deposit requirements by a significant number of lenders.

“In the last 12 months we’ve seen at least 25 lenders ease their deposit requirements and increase their LVRs (loan-to-valuation ratios) to assist borrowers getting into the market for the first time,” Canstar Cannex financial analyst Mitchell Watson says.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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