Is housing unaffordable for first time buyers?

November 10, 2015
Ian Robinson

New data from Mortgage Choice highlights attitudes of FHBs


More than 80% of first home buyers who are planning to purchase property within the next two years believe housing is unaffordable in their state.


According to Mortgage Choice’s annual First Home Buyer Survey, 80.6% of those purchasing property for the first time consider housing to be ‘unaffordable’.


The percentage of first home buyers who consider housing to be unaffordable is significantly higher in New South Wales and Victoria than it is in Queensland and South Australia.


Across the country, first home buyers in New South Wales were the most disillusioned about property prices, with 86.9% of respondents stating housing was unaffordable in their state. Victoria was next with 85.7% of first time buyers saying property was too pricey. Meanwhile, in South Australia and Queensland 76.8% and 75.4% of first home buyers respectively said housing was unaffordable in their states.


It was unsurprising to see the majority of first home buyers believe housing is unaffordable, as data from the Australian Bureau of Statistics shows the average home loan has grown almost four times faster than the average Australian full-time wage in the last two years.


According to the data, the average home loan grew by 18.5% in the two years to April 2015 – from $301,800 to $357,500. Meanwhile, the average Australian full time wage grew just 3.6% from $77,225 to $80,054.


As a result, the average home loan size in Australia is now approximately 4.5 times larger than the average wage – up 25% in the last two years. In 2013, the average loan size was 3.9 times the average full-time Australian wage.


These statistics are worrying as they clearly show wages aren’t keep up with property prices.


At Mortgage Choice, we believe it is time for the government to act and introduce measures that would make it easier for first time buyers to purchase property. Our data shows the majority of potential first home buyers would like to see the government re-introduce a grant for established properties.


While the various states currently have first home buyer grants in place for those who purchase a newly built property, nothing is given to those buying established properties, which is approximately 80% of all first time buyers.


According to the survey, 42.5% of respondents said they would like to see the government introduce a first home owner grant for established properties, while a further 30.6% would like to see the government remove stamp duty for first time buyers. Now is the perfect time for the government to introduce a new incentive for first time buyers. With property prices rising steadily across most markets, a lot of first time buyers are finding themselves priced out of the market. To rectify this problem, the government really needs to act.


Now we have a new Prime Minister in place, I would like to see the plight of first time buyers receive the attention it deserves.


If you would like learn more about your home loan or financial advice options, call Ian and the team on 07 5474 4100.

Posted in: First home buyers

Contact us today.

Additional Comments? * :