The number of first home buyers has drastically dropped in 2021, with rapidly increasing house prices continuing to lock them out.
The latest Australian Bureau of Statistics (ABS) report shows a 20 per cent decline in first home buyers since January this year, with a 6.8 per cent drop in July alone.
The ACT currently sits with the fourth highest first home buyer ratio at 31.6 per cent of all buyers, with WA leading the country on 37.6 per cent, and SA at the bottom of the list on 25 per cent.
Real Estate Institute of Australia (REIA) president Adrian Kelly said the number of first home buyers plummeted during July due to homes just not being affordable for those trying to enter the market.
“Demand from investors continues to dominate with this sector seeing continued growth over the past year, almost doubling in value,” Mr Kelly said.
“Investors re-entering the market is a very good thing for private rentals and overall confidence in the economy; but the end of first home buyers housing stimulus programs introduced with the onset of the COVID-19 pandemic is a strong factor in these figures.”
Although the drop of 20 per cent is significant, the proportion of first home buyers was still 20 per cent higher than last year.
Mr Kelly said the removal of HomeBuilder grants would continue to see this percentage fall, rather than climb.
“The largest fall was seen in Victoria followed by Queensland and NSW and it is likely these states will experience further falls as lockdowns continue to impact on the market,” he said.
Borrower refinancing of housing loan commitments between lenders reached $17.2 billion this July (seasonally adjusted), which is an all-time high.
Compared to only a year ago, the value of refinancing between lenders is 60 per cent higher.
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