First home buyer lending drops to lowest point since 2004

First home buyer lending has dropped to its lowest point since April 2004, according to the Australian Bureau of Statistics.

The proportion of first home buyers being lent money has dropped to 13.7% of borrowers for August, down from 14.7% in July.

The Real Estate Institute of Australia says this is far lower than the long-run average proportion of 20.1% despite eight 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 per cent of first home buyers prefer,” REIA President Peter Bushby says.

“With the proportion of first home buyers remaining consistently below the long term average, despite the latest figures incorporating all the interest rate cuts, this and a review of inefficient state taxes such as stamp duty, need to be a high priority issue for the new Government.”

In trend terms the number of owner-occupied finance commitments rose by 0.6%, the lowest monthly increase, since January.

There were increases in trend terms in all states except Western Australia with the largest increase in the Northern Territory, up 2.3%.