The number of Australians buying their first homes has grown in ways not seen for a decade, according to a peak real estate industry body, but not everything is sweet for young folks who just want to keep a roof over their heads.
The Real Estate Institute of Australia (REIA) today revealed the number of first home buyers grew by 36.1% over the September quarter, meaning they comprised 40.8% of the owner-occupier market.
REIA reckons first home buyers comprised their highest percentage of new home commitments since 2009, and experienced the biggest quarter-on-quarter increase since 2010. Young people! Buying homes! Unreal.
There’s a slew of factors which likely contributed to those figures.
Domain reports median house prices in Sydney climbed 1.2% in the September quarter, down from 4.8% over the same time period in 2019, while Melbourne home prices stayed level over those three months. A temporary blip in Australia’s ‘Only Ever Goes Up™’ housing market may have allowed some punters to swing their cash around.
Beyond that, basement-level interest rates, and the Reserve Bank’s desperate attempts to get people spending dosh, may have encouraged first-time buyers to take on mortgages.
Late last month, The Age also reported the Federal Government’s HomeBuilder stimulus scheme, which punts $25,000 towards eligible buyers, has also encouraged some first-time homeowners.
Moving forward, initiatives like the Victorian Government’s stamp duty slashing may have a further impact on first home buyers.
That doesn’t necessarily mean everyone is walking away with a bargain, though.
“The average loan size to first home buyers decreased to $406,223, a decrease of 5.4% over the quarter,” REIA President Adrian Kelly said in a statement.
But that figure marks “an increase of 0.8% over the past 12 months.”
Even in a year beset by a pandemic, the average mortgage appears to be growing.
The fun doesn’t stop there. REIA figures state “Australian families experienced a small income increase of 0.5%”, but that may be partly due to JobKeeper and the boosted JobSeeker allowance, which some researchers believe lifted stacks of Australians above the poverty line.
JobKeeper and the JobSeeker Coronavirus Supplement were both extended until the end of March 2021, but will face significant cuts before petering out.
As for renters: forget it. REIA data says this year’s temporary softening of rental prices is donezo. The proportion of income required to cover rent grew 0.4% to 23.7% over the September quarter.
Where does that leave us, then? Well, for some Australians, the chaos of 2020 has provided a rare opportunity to enter the market. The rest of us will have to look at the prospect of a $406,223 home loan and dream.
