It’s bad news on the first-home buyer front with figures showing they are at their lowest level for over a decade.
The Australian Bureau of Statistics numbers show first-home buyers have fallen to 13.9 per cent of all home buyers in May which is the lowest it’s been since 2004.
When figures were last this low it was when first-home buyer grants were being dismantled.
According to BIS Shrapnel’s Angie Zigomanis, the only way first-home buyer numbers can start climbing again now is if house prices fall.
“A drop in prices of some sort is needed, but we’ll also need a reduction in expectations in terms of what first-home buyers are looking for,” he told Domain.
“At some point they have to come back, in theory…but for now the market is tough.”
The housing market has been showing plenty of signs it is set for a cooling period, but HSBC’s chief economist Paul Bloxham said he doesn’t expect first-home buyers to return to the market any time soon.
“The next major catalyst for a first-home buyer resurgence may be a bit of a pullback in apartment prices in some cities that may spur some interest from first-home buyers if you see some declines in prices in the apartment market, but finding the trough is a little while off,” he told Domain.
“Prudential settings remain tight, there’s significant apartment supply coming to market and the increase in taxes for foreigners purchases will likely constrain foreign interest in housing markets to a degree as well.”