The head of an off-the-plan property agency believes the first home buyer sector in Australia is in a severe decline.
Mark Mendel, chief executive officer of iBuyNew, believes research carried out by his firm and recent figures from the Australian Bureau of Statistics (ABS) show that the number of Australians looking to buy their own home, especially those from younger generations, has collapsed.
According to Mendel, iBuyNew’s own data shows the number of first home buyers aged 25-35 55% of the sector at the end of the 2015 fiscal year to 40% by June 30, 2016.
iBuyNew’s figures coincide with the release of lending figures from the ABS revealed that the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell to 13.9% in May, the lowest point in more than a decade.
Mendel believes young people are turning away from buying their own home partly because of market conditions such as rising prices as well as negative media coverage of the real estate and home finance markets.
“Despite record low interest rates, the first time buyer sector has collapsed,” Mendel said.
“Even though property is very affordable with interest rates set to stay at historical lows, young Australians have been put off entering the market,” he said.
Mendel said he hoped young people and first home buyer might return to the market now that the fallout from the federal election has passed, though he also believe governments should be doing more to assist first home buyers.
“A recent survey we conducted found while the majority of people weren’t deterred from purchasing property by the election, a lot of people wanted to await the outcome,” he said.
“It’s an issue for state and federal governments with the current schemes to entice first home buyers out of the rental market either out of date or ineffective.”
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