Housing affordability woes deepen for first-home buyers – REIA

ABS data confirms findings of professional body's latest Housing Affordability Report

Housing affordability woes deepen for first-home buyers – REIA

The latest lending stats from the Australian Bureau of Statistics (ABS) show once again how difficult it is for first home buyers to get on the property ladder, according to the Real Estate Institute of Australia (REIA).

The ABS figures showed a 6.9% decrease in owner-occupier first-home buyer loans, marking a significant downturn. However, when compared to the same period in 2023, there was a 4.4% increase, indicating some growth over the year.

Leanne Pilkington (pictured), president of the Real Estate Institute of Australia, attributed this slowdown to the rising interest rates and prevailing economic challenges.

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“The value of these loans fell 6% in the month, but was 13.2% higher compared to a year ago,” Pilkington said. “In original terms, the average loan size for a first-home buyer loan rose from $485,000 to $514,000 over the year.” 

As of December, the cash rate was reported at 4.35%, a factor Pilkington believes is exacerbating the affordability crisis for those with mortgages.

REIA’s Housing Affordability Report also paints a grim picture, revealing a 2.7-percentagepoint drop in national housing affordability over the last quarter. Currently, households are dedicating 47.7% of their income to mortgage repayments, a stark indication of the pressure on homeowners.

The report also highlights that housing affordability in New South Wales, Victoria, South Australia, Tasmania, and the Australian Capital Territory has hit its lowest level in two decades.

Despite a two-month consecutive drop in owner-occupier lending, the overall year-on-year trend shows a slight improvement of 1.5%.

“The number of refinanced owner-occupier home loans between lenders fell 7.6% and was 30.8% lower than a year ago,” Pilkington said.

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