First-home buyers missing out amid positive outlook for nation's housing market: Peter Bushby

The latest housing finance figures released by the Australian Bureau of Statistics (ABS) show that total lending for housing continues to grow steadily in response to interest rate cuts and the positive housing outlook, but that first-home buyers are missing out.

Housing finance figures for July 2013 show, in trend terms, that the number of owner-occupied finance commitments rose by 1.6% – following increases of 2.1% in June and 2.4% in May.

If refinancing is excluded, the increase, in trend terms for July, is 1.5%. 

Increases were recorded in all states with the largest increases in the ACT and Queensland, up 2.0% and 1.9% respectively, in trend terms.

There are increases in the purchase of established dwellings (up 1.8% in trend terms), the purchase of new dwellings (up 1.4% in trend terms) and the number of commitments for the construction of new dwellings (up 0.2% in trend terms).

The proportion of first-home buyers in the number of owner-occupied housing finance commitments fell to 14.7% compared to the June figure of 15.1%. The figure remains persistently low compared to the long-run average proportion of 20.1% despite seven interest rate cuts since November 2011.

In large part, this drop can be attributed to state governments withdrawing previous levels of support for first-home owners buying established dwellings and it is established dwellings that 80% of first home buyers prefer.

The value of investment housing commitments rose by 0.8%, in trend terms, in July resulting in over a year of consecutive monthly increases.

With the proportion of first-home buyers remaining consistently below the long term average, this needs to be a high priority issue for the incoming government.

Peter Bushby is president of the Real Estate Institute of Australia.