Housing affordability crisis deepens as first-home buyer numbers drop
By
Previous post
The housing affordability crisis in Australia has intensified, with new figures from the Australian Bureau of Statistics (ABS) revealing a concerning decline in first-home buyer activity despite rising loan values.
Real Estate Institute of Australia (REIA) President Leanne Pilkington said housing affordability has become a critical issue, with the proportion of family income required for loan repayments reaching significant levels.
“Despite an overall 1.0% increase in the total value of new housing loans to $30.4 billion in August, the number of loans for first-home buyers dropped by 1.5%, signalling a troubling trend,” Ms Pilkington said.
The decline in first-home buyer loans reflects the ongoing challenges faced by young Australians trying to enter the property market.
Ms Pilkington highlighted the strain on affordability, exacerbated by rising property prices and higher interest rates.
“We are facing a critical issue—families are stretching their finances to unprecedented levels to meet loan repayments, leaving first-home buyers increasingly sidelined,” she said.
While the value of new investor loans rose 1.4 per cent to $11.7 billion, 34.2 per cent higher than August 2023, Ms Pilkington noted this primarily reflected price growth across the nation rather than a significant influx of new investors.
==
==
“With investor loans up 34.2% since August 2023, the increase is almost solely due to an influx of investors in Queensland which saw an incredible $200 million rise. Every other state except the ACT recorded losses,” she said.
Ms Pilkington expressed concern about the decrease in investment loans across the country, particularly in light of current discussions surrounding negative gearing.
She emphasised the need for policies that encourage housing supply as a long-term solution to the affordability crisis.
“While first-home buyer (FHB) loans may have dipped, addressing supply shortages and broader cost-of-living issues will be more effective in ensuring sustainable affordability for both FHBs and investors,” Ms Pilkington said.
The REIA President called for urgent policy intervention to address the growing imbalance in housing affordability across the country.
Established in 1924, the REIA represents 85 per cent of Australian real estate agencies and advocates for the industry, which comprises 46,793 businesses employing 133,360 Australians.