First home buyers are now making up 18% of the market says RiskWise Property Research
Between the number of Aussies who are nervously awaiting the final big four hike and those dreaming of owning their first home, the Aussie property market has seen better days.
Figures from the Household Income and Labour Dynamics in Australia (HILDA) survey show that between 2001-2004 and 2013-2016, home ownership overall fell by -3.7% across Australia, but this figure rose to -5.9% for the 18-24 age group.
The survey also revealed that first home buyers now make up around 18.1% of the market, an increase of 4.9% from July 2016.
According to RiskWise Property Research CEO, Doron Peleg, this could be a result of the tighter lending restrictions imposed by APRA, locking investors out of the market.
“There are three main players in the property market - investors, upgraders, and first home buyers - and what we are seeing is that more money is being lent to homeowners than investors,” he explained.
“The good news is where we see there is lower investor activity, we see house price decline and therefore first home buyers are able to enter the market.”
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However, the lack of family-suitable housing is also predicted to increase property prices, making it tougher for first home buyers to break into the market.
Peleg believes that while the Federal Government are looking into the issue, there still needs to be a better plan put in place to encourage the building of more suitable housing.
“Without a strategic and comprehensive solution, it is likely that the current supply and demand patterns will once again lead to escalating prices, deteriorating housing affordability and a reduction in home ownership in Australia,” he said.
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Peleg also recommended that incentives for meeting pre-approved development targets and increasing dwelling supply be offered from federal to state governments and state to local governments.
“Governments should also be encouraged to increase land supply release and development through coordinated strategy and targets,” he said.
But if you’re one of the lucky Aussies ready to snatch up your first home, you’re going to have to start shopping around for a great home loan. Our home loan comparison tool can help find the right loan you, and get you into the property of your dreams.