Lack of First-Home Buyer Activity
Market analysts have voiced concern over first-home buyers holding back from entering the property market, and noted the the flow-on impact that this has been having on the overall housing recovery rates.
Commentators believe that different first-home owner benefits on offer by state and territory governments, all with different expiry dates, have added to the problem.
They have been increasing demand for a period of time, but are then leaving a vacuum once the incentives are eventually withdrawn.
According to the Australian Bureau of Statistics (ABS) figures for housing finance, activity by first-home buyers accounted for only 14.2% of overall finances for owner-occupied housing in March, showing a further contraction in activity from February’s figures of 14.4%. The ABS results revealed that first-home buyers seeking finance are at their lowest rate in nine years, since May 2004.
Just twelve months ago, this sector made up over 18% of the total housing finance market, while in May 2009 this segment of the market accounted for 31.4% of total buyer activity.
It is believed that the $7,000 First-Home Owners Grant (FHOG) or established dwellings and $14,000 for new houses was responsible for the success of the sector.
Commenting on the figures, Matther Hassan, Westpac economist, noted the lack of first-home owner activity as a critical issue in generating a sustained housing market recovery and driving ongoing growth in buyer activity.