First home buyers face tougher property market compared to a decade ago

First home buyer numbers are staying strong despite record low proportion of home loans financed

The Australian Bureau of Statistics (ABS) released its August Housing Finance data yesterday (Friday, October 10, 2014).

Here are the key findings according to house2

  • Despite the proportion of first home buyers hitting a new record low of less than 12% out of all home loans financed in August, first home buyer numbers are relatively strong compared to a decade ago.
  • The latest ABS Housing Finance data shows that the proportion of first home buyer home loans was 11.8% in August – the lowest level ever recorded
  • There was also a 10% drop in the number of first home buyer home loans financed in August, from 6,718 in July to 6,055
  • However, the number of first home buyer home loans is close to the same level as a decade ago. For the 12 months to August 2014, there were 77,881 first home buyer loans financed, compared to 87,577 for the same period 10 years ago, for the year to August 2004.

First home buyers face tougher property market compared to a decade agosell up

  • First home buyer numbers are at almost the same level as a decade ago, despite some capital cities experiencing more than double growth in median house prices and fewer incentives.
  • In 2004, the First Home Owner Grant was uncapped so all Australian first home buyers were eligible for the $7000. Compared to today, the government has tightened its incentives, with limitations to new homes and caps, which vary across each state.
  • The national median house value has risen by 72% in the past decade, from $325,000 in 2004 to $559,376 in 2014.
  • The biggest jump was Darwin, with 170% increase over the past decade

Median house prices across capital cities

  2014 2004 Difference % difference
Sydney $782,973 $560,000 $222,973 40%
Melbourne $604,110 $375,000 $229,110 61%
Canberra $557,871 $375,000 $182,871 49%
Brisbane $466,980 $300,000 $166,980 56%
Darwin $675,478 $250,000 $425,478 170%
Perth $611,410 $250,000 $361,410 145%
Adelaide $450,444 $250,000 $200,444 80%
Hobart $325,741 $240,000 $85,741 36%
National average $559,376 $325,000 $234,376 72%

Source: analysis of Australian Property Monitors, Real Estate Institute of Australia

First home buyers are out in forcecalendar

  • Even with lower numbers of first home buyers, there are many Australians on the hunt for their first home this mortgage season
  • If you are looking for a home, it’s important to do your research before hitting the market. Use online calculators to work out how much you can afford and make sure you plan for higher repayments, with interest rates tipped to rise next year. The Reserve Bank Survey, which is now the biggest in Australia, found all 28 leading experts and economists are forecasting the cash rate to start rising next year, with an expected gradual rise to 4 percent over the next two-three years. That means home loan repayments for a $300,000 home loan is likely to increase by $300 per month.

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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit

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