First home buyer activity has reached a 10-year low according to the latest official figures, despite an investigation into first home buyer data resulting in an upwards revision last week.
Housing finance figures, released by the Australian Bureau of Statistics yesterday, revealed that first home buyers' share of new loans fell 0.1% to 14.5% in December. This figure is the lowest since May 2004 and shows a steady decline since May 2012.
When the statistics bureau admitted an error in its calculations of first home buyer activity last week, there was a collective sigh of relief from the industry and homebuyers alike.
The bureau said its investigation revealed a degree of under-reporting by some lenders on loans to first home buyers, which were not including figures for first home buyers who did not receive first home owner grants.
However, Amanda Lynch, the chief executive of the Real Estate Institute of Australia says the adjusted figures released yesterday “do little to ease concerns within the industry that this vital group is dropping out of the market”.
The figures suggest that growing investor demand may still be responsible for pushing first home buyers out. Investor demand increased by 6% in the month and the segment now accounts for approximately 41% of all new loans written.
Jessica Darnbrough, spokesperson for Mortgage Choice says this is the highest level on record and is likely the reason behind first home buyers recording the lowest share of the home loan market in 10 years.
The December figure remains well below the long-term first home buyer activity average of 19.8%. The data also revealed that the average loan size for first home buyers rose almost $5,000 to $332,200 in December.
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