First Home Buyers – where are you?

“First-home buyers at lowest share of new home loans in more than eight years: historical data to 1991”, this is the title of a piece written for ‘Property Observer’ by Larry Schlesinger on Wednesday (Feb 13, 2013).

I think this will change in the March quarter, in Perth at least. That’s the problem with statistics, they always look at the past, not what’s happening now.

Nevertheless it is an interesting article and I’ve copied it here for you!

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.

Source: Property Observer, Wednesday 13 February, 2013

About Bernie Kroczek

Bernie Kroczek has been in real estate for over 26 years. He prides himself on offering an alternative to the usual way of doing real estate. He also likes to offer plenty of free information to help people make the best decision when buying or selling property.

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