First-home buyers at lowest share of new home loans in more than eight years: historical data to 1991

Plummeting first-home buyer numbers have raised fresh questions about recently introduced first-home buyer grant schemes on offer in NSW as well as raise issues about current housing affordability. 

The number of loans to first-home buyers in December 2012 fell to 14.9% according to ABS figures, the fourth consecutive month that this segment of the market has declined.

This a 37% decline on figures from a year ago when first-home buyers accounted for more than one in five new home loans (21.1%).

This was the weakest proportion of first-home buyers in the housing market since June 2004 and just two percentage points off the record low of 12.8% in March 2004 for ABS figures going back to July 1991.

The decline suggests that the new first-home owner grants in Queensland and NSW, which provide generous handouts of $15,000 – but only for those who buy or build new homes – have missed the mark and are as claimed by the likes of Ray White chairman Brian White nothing more than a builder or developer incentive.

In addition they suggest housing remains unaffordable or undesirable for most prospective first-home buyers with low mortgage rates and a decline in capital city house prices over the last few years failing to spur this segment of the market in a meaningful way.

The fall was sharpest in NSW, where there was a 3.2% decline as well as a smaller 0.8% drop in Queensland and a 1.9% decline in WA. 

“The state detail was something of a surprise,” notes Westpac, who called the December figures “another weak reading” for first-home buyer activity. 

“We had expected unwinding first-home buyer demand in NSW (from an earlier bring-forward relating to state government changes) to have run its course by December with weakness to instead centre on Victoria where stamp duty concessions coming in from January 1 would have encouraged many FHBs to delay purchases. 

“Instead, the sharp slide in NSW continued (–3.2%) with Victoria posting a slight rise (+0.3% for the month). 

Westpac estimates that approvals in this segment were down another 5.7% in December on a seasonally- adjusted basis.  

First-home buyer numbers peaked in May 2009 following of the doubling of the first-home owners grant to $14,000 for those buying existing homes and trebling it to $21,000 for those buy newly built homes in October 2008. 

First home buyers as percentage of home lending dating back to 1991 (ABS)

 

Month

Number of FHB loans

% of new loans

Size of loan ($)

Dec-1991

5654

20.7

71.5

Dec-1992

7733

22.2

76.9

Dec-1993

10139

22.4

83.0

Dec-1994

7789

21.5

90.3

Dec-1995

7218

21.9

89.8

Dec-1996

8427

23.0

99.2

Dec-1997

8047

21.0

104.0

Dec-1998

8651

22.6

120.7

Dec-1999

10264

22.0

134.7

Dec-2000

9654

22.3

123.0

Dec-2001

12745

25.8

146.5

Dec-2002

7998

15.9

160.2

Dec-2003

7618

13.3

185.2

Mar-2004*

7083

12.8

191.5

Jun-2004**

7428

14.3

204.5

Dec-2004

8845

16.6

210.3

Dec-2005

10811

18.8

217.1

Dec-2006

10241

18.0

228.5

Dec-2007

11282

19.4

230.9

Dec-2008

14142

27.2

271.3

May 2009***

18744

31.4

279.4

Dec-2009

11793

23.5

293.3

Dec-2010

8199

17.3

289.2

Dec-2011

10264

21.1

285.1

Jan-2012

8043

20.6

282.8

Feb-2012

7360

17.4

279.8

Mar-2012

7902

16.6

281.8

Apr-2012

7077

17.0

282.5

May-2012

9110

18.1

288.3

Jun-2012

8415

18.5

292.0

Jul-2012

8760

19.2

291.2

Aug-2012

8921

18.6

288.9

Sep-2012

8391

19.3

289.2

Oct-2012

9215

18.7

288.0

Nov-2012

7921

15.8

287.8

Dec-2012

6557

14.9

293.9

Source: ABS

*Record lowest proportion of first-home buyers

**Previous lowest proportion of first homebuyers after December 2012

***Highest proportion of first-home buyers

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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