This article is from the Australian Property Journal archive
FIRST home buyers have deserted the market, accounting for only 2.8% of mortgage sales in New South Wales last month, compared to 48.5% by investors, according to AFG.
AFG’s Mortgage Index shows this is the worst ever first home buyer figure for NSW.
The average mortgage processed was for $436,000 – an 8% increase on the $404,000 figure in May this year. This continues the trend of the average home loans increasing steadily in size during the past six months.
During this same period, the proportion of first home buyers has steadily declined from 13.6% of all mortgages processed in May to 10.3% in November – a decline of 24%.
AFG general manager of sales and operations Mark Hewitt said the increase in average home loans could be due to the greater participation by investors and borrowers seeking to upgrade their homes, than of rising house prices.
Loan to value ratios – the value of a loan expressed as a percentage of a property value – have held steady over the past six months, moving between 68.2% and 69.1%.
Whereas participation by first home buyers continues to fall and varies dramatically by state.
In NSW, only 2.8% of new mortgages were for first home buyers – compared with 48.5% for investors.
Elsewhere, first home buyers comprised 6.2% in Queensland, 11.4% in Victoria, 16% in South Australia and 20.2% in Western Australia.
While WA leads the nation for first home buying activity over the past year, this 20% figure is still much lower than the 24.4% figure recorded six months ago in May 2013.
“Overall, the mortgage market is in robust, good health, and it’s encouraging to see more people willing to upgrade their homes and buy investment properties.
“But urgent action is needed to address the absence of first home buyers from markets in NSW and QLD. We need to see a lot more people get on the property ladder to underpin the long term sustainability of those markets,” Hewitt said.
Property Review
