First-home buyers giving up as loans to young Aussies drop

The number of first-home buyers in Australia has fallen.

The ideology of property ownership is being cast aside by an increasing number of young Aussies.

The overall value of home loans rose slightly in August. However, that uptick in activity “masks” the worrying trend of fewer debutant buyers in the market, according to the Real Estate Institute of Australia.

The value of new loan commitments in August lifted by 1 per cent, to hit $30.38 billion, the Australian Bureau of Statistics reveals.

However, at the same time, the number of first-home buyers taking out mortgages dropped by 1.5 per cent, showing young Aussies are not those participating in the loan spike.

Leanne Pilkington, president of the REIA, said the figures are “troubling”.

“The fall in first-home buyer loans points to the ongoing struggles faced by young Australians attempting to enter the property market,” she said in a statement.

“The decline reflects the strain on affordability, exacerbated by rising property prices and higher interest rates, which are pushing home ownership further out of reach.

“We are facing a critical issue – families are stretching their finances to unprecedented levels to meet loan repayments, leaving first-home buyers increasingly sidelined.”

The deposit amount needed by first-home buyer has ballooned over 12 years.

Analysis by Money.com.au shows young Aussies need to squirrel away a 99 per cent bigger house deposit compared to 2012.

Twelve years ago, a first–home buyer would have to stump up $48,990 for a 10 per cent deposit, based on ABS dwelling values. Today, the figure required is $97,330.

However, if the buyer wanted to skip paying Lenders’ Mortgage Insurance, they would need to provide their bank with a 20 per cent deposit. In 2012, that would be $97,980 and today it’s $194,660, Money.com.au research reveals.

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