Canberra first home buyers fall

First home buyer’s numbers in the ACT fell sharply over July although activity from this group this year so far remains well ahead of last year’s results.

Latest data from the ABS reports that just 157 loans were approved for first home buyers in the ACT over July. This was well down in this year’s monthly high of 186 recorded over June and the lowest monthly result since the 127 loans approved over January.

The number of first home buyer loans approved over the first 7 months of this year however remains a strong  16.7 percent higher than approved over the same period last year – an increase of 166.

The average home loan for first home buyers increased slightly over July to $319,500 but remains well below this year’s peak monthly result of $336,900 recorded over May. The current average ACT first home buyer loan is equivalent to a purchase price of around $400,000 with a typical 20 percent deposit which together with stamp duty would require savings of around $90,000 for an established home.

First home buyer loan market share fell to 11.9 percent of all residential lending approved over July and remains well below the 16.9 percent long-term market share average for the ACT.

Regulator authorities have acted recently to curtail residential investor lending through increases in interest rates to this group. Perhaps it’s time to consider corresponding initiatives to cut interest rates for first home buyers to revive the great Australian dream of home ownership which for many aspirants given significant deposit requirements s remains a nightmare.

Dr Andrew Wilson is Domain Group Senior Economist Twitter@DocAndrewWilson The Property Show expert 2UE Saturdays 12.30-1pm