If Lara Bingle was to reinvent her spot as ambassador for the Australian Tourist Commission, she might well do it for the first home buyers in Victoria and once again pose the question: “Where the bloody hell are you?”
Victorian first home buyers have gone missing despite record low interest rates and home prices still not at a nominal peak.
Australian Bureau of Statistics figures show October 2013 recording the lowest proportion of first home buyers in 20 years, and in November only 12.2 per cent of loans were for them, compared to the average over the last 20 years of 21.4 per cent.
There are a couple of standout reasons that may be leading the charge for these statistics, firstly, the Victorian Government’s $7000 First Home Buyers Grant (FHBG) was abolished in July and the proportion of those buying a home for the first time fell by four points and haven’t bounced back since.
It’s unlikely this is the sole reason though, as there is still a government grant for newly built homes, and there are stamp duty cuts of 40 per cent also. These cuts will soon rise to 50 per cent and it will be interesting to see if brings back first home buyers into the housing market.
The other main reason observers have noticed causing this absence is investors crowding out first home buyers from the property market. Not only do they snap up property that first home owners may want but their increased demand to pick up a savvy investment can inflate prices too quickly for young first home owners to keep up who have less access to funds.