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First home buyers left behind as housing finance improves

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The Real Estate Institute of Australia (REIA) says the latest housing finance figures released by the Australian Bureau of Statistics (ABS) show that whilst total lending for housing is growing in response to interest rate cuts
and the positive housing outlook, first home buyers are being hampered by state government initiatives favouring the purchase of new housing.

Housing finance figures for May 2013 show, in trend terms, that the number of owner-occupied finance commitments rose by 1.8 per cent – following increases of 1.9 per cent in both March and April.

If refinancing is excluded, the increase, in trend terms for May, is 2.0 per cent.

REIA President, Peter Bushby says, “Increases were recorded in all states except the Northern Territory. The largest increases were in Western Australia and South Australia, up 2.4 per cent in trend terms.”

“There are increases in the purchase of established dwellings (up 1.7 per cent in trend terms), the purchase of
new dwellings (up 3.6 per cent in trend terms) and the number of commitments for the construction of new dwellings (up 1.3 per cent in trend terms),” Mr Bushby continued.

“The proportion of first home buyers in the number of owner-occupied housing finance commitments rose slightly to 14.6 per cent compared to the April figure of 14.3 per cent. The figure remains persistently low compared to the long-run average proportion of 20.1 per cent.”

“In large part, this drop can be attributed to State Governments, except Western Australia, withdrawing previous levels of support for first home owners buying established dwellings and it’s established dwellings that 80 per cent of first home buyers prefer.”

The value of investment housing commitments rose by 0.9 per cent, in trend terms, in May resulting in the
eleventh consecutive monthly increase.

“With the proportion of first home buyers remaining consistently below the long term average, this should be a priority issue for both major parties as we approach the federal election,” concluded Mr Bushby.

REIA’s Election Policies can be found at http://reia.com.au/userfiles/MEDIARELEASE_1372030438.pdf

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