Housing affordability has been a major issue in recent times, across virtually all segments of the housing market, but none more so than First Home Buyers.

Posted in: Insights, News


First home buyers are particularly sensitive to fluctuations in housing demand and supply, mainly due to their limited deposits and more sensitive borrowing capacities as they attempt to enter the market. Increased activity by investors and overseas buyers has seen demand across all housing price points in the market cause a general increase in house prices.   

First Home Buyers are the ‘canary in the coalmine’ when it comes to measuring the overall health, stability and future trends of the housing market. In recent years, First Home buyers have been increasingly priced out of the market and their numbers have dropped from a long term average of around 18-20% of house sales, to as low as less than 10% of sales in some States.

However, recent policy changes by APRA, the Authority governing the Banks, to restrict new lending to Investors, Interest Only borrowers and foreign investors, is starting to have a major impact in the market, thereby reducing demand from those buyers and generally slowing demand in the market.   These policy changes now mean that First Home buyers are more able to compete in the market.

A report recently released by the Real Estate institute of Australia shows that First Home buyers has increased nationally by 22.8% over the last quarter and by 32.6% over the last 12 months and now make up 24.5% of the national total owner occupied housing market.

In South Australia, the proportion of income required to meet monthly loan repayments decreased to 25.3%, a decrease of 1.5% over the last quarter. Additionally over the last quarter the number of loans to First Home buyers increased by 2% and an increase of 12.6% compared to the same quarter last year. This led to an increase in the overall First Home buyer proportion of all owner occupied sales to 19.2%, which brings the proportion of First Home buyers back towards long term averages.

If you are a potential First Home buyer, now may well be the time to start looking to make the move into home ownership. However, with the increase in First Home buyers in the market, make sure you discuss how much you can afford and have a finance pre approval in place before you get too serious about making an offer on your first home.

A Bernie Lewis Home Loans Mortgage Adviser can arrange a free no obligation finance pre approval to help ensure you maximise your chance of achieving the dream of home ownership, call us today on 08 8300 8300.