Why Fewer First-Timers Are Buying Homes and Where They’re Bouncing Back?
BY PROPCREW | JUNE 3, 2024
Let’s chat about something that’s been on many people’s minds: buying your first home in Australia right now! It’s no secret that it’s been super tough for first-time home buyers lately. With interest rates on the rise and wages not keeping up, scraping together a deposit for a home has become a real challenge.
According to the Australian Bureau of Statistics, about one in five new home loans went to first-time buyers in March. This number has been pretty steady for a couple of years, but it’s actually down from 30% back in January 2021. Yep, things have gotten harder with interest rates going up by about 30%, fewer government handouts, and house prices still climbing.
But here’s the thing: it’s not the same story everywhere in Australia. While places like Victoria and the ACT are seeing more first-timers getting loans—about 25% to 28% of all new loans—Queensland and South Australia are lagging behind, with less than 20%.
Western Australia has had the biggest drop, from 40% of new home purchases being by first-timers in January 2021 to just 23% in March. A big part of this drop is due to more investors jumping into the market. In Perth, which has seen the biggest house price increase of any Australian city last year, investors are really making their presence felt.
Now, while buying a home is getting tougher, renting isn’t any easier, especially in Western Australia. It’s gotten way more expensive to rent, both in Perth and the regional areas, making it even harder for people who are saving up to buy.
But there's a silver lining in Victoria, especially around Greater Melbourne. The house prices there haven’t risen much since the pandemic, making it a bit easier for first-time buyers. In fact, homes in Greater Melbourne are now cheaper than those in Greater Brisbane!
Despite all the challenges, there’s a bit of good news. More people are starting to look into buying their first home, even though the numbers aren't quite back to where they were last year. It seems the tough rental market might be pushing more folks to consider buying instead.
Still, with prices on the rise and the cost of living going up, first-time buyers might have to make some tough choices about where and what they can afford.
So, if you’re thinking about getting into the market, keep your options open and maybe look into areas where first-time buyers are making a comeback. It’s not easy, but it's definitely not impossible to find that dream home to call your own!