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First home buyers face uphill battle, latest lending stats reveal


The Australian Bureau of Statistics (ABS) has released figures indicating a downturn for first home buyers in January 2024, as the number of owner-occupier first home buyer loans decreased by 6.9%. Despite a 4.4% increase compared to January 2023, this slowdown is attributed to the challenges posed by rising interest rates and economic difficulties, according to Leanne Pilkington, President of the Real Estate Institute of Australia (REIA).

“The value of these loans fell 6.0% in the month, but was 13.2% higher compared to a year ago. In original terms, the average loan size for a first home buyer loan rose from $485,000 to $514,000 over the year,” Pilkington explained.

With the cash rate at 4.35% by December 2023, the strain on housing affordability for mortgage holders has intensified. The latest REIA Housing Affordability Report (HAR) underscores a significant decline in national housing affordability by 2.7 percentage points over the quarter. It further reveals that the average household now allocates 47.7% of their income to mortgage repayments.

“Housing affordability in New South Wales, Victoria, South Australia, Tasmania, and the Australian Capital Territory (ACT) is at its lowest point in 20 years,” Pilkington stated.

The ABS data not only showed a decrease in owner-occupier lending for two consecutive months but also a 1.5% growth in trend terms over the year. Furthermore, the report highlighted a 7.6% decrease in the number of refinanced owner-occupier home loans between lenders, marking a 30.8% drop compared to the previous year. This decline reflects an ongoing struggle for first home buyers in the current economic climate.

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