First home buyers are dominating Australia’s property market for the first time in decade, new data from the Real Estate Institute of Australia (REIA) has revealed.
Market entry for first home buyers has registered a 36.1% rise in the three months ending September – the largest quarterly increase in 10 years and highest year-on-year jump since 2009, according to REIA’s latest Housing Affordability Report.
First home buyers now constitute 40.8% of the owner-occupied dwelling market, coinciding with an overall improvement in housing affordability across the country.
REIA president Adrian Kelly said that a combination of factors meant that housing affordability has benefited those who entered the market during the September 2020 quarter.
“This is particularly good news given the large challenges faced by tenants at the outset of the COVID-19 pandemic,” he said.
The report showed that the average loan size to first home buyers decreased to $406,223, a 5.4% quarterly drop, but a 0.8% rise over the past 12 months.
Kelly said these figures were reflective of how first home buyers are responding to the stable market and historically low interest rates.
The report also found that Australian families experienced a small income increase of 0.5 percentage points, while the average loan repayment went down by 2.5%.
Housing affordability likewise improved for homeowners, with income to loan repayments decreasing 1.1 percentage points to 33.9% over the quarter.
However, rental affordability declined in the September quarter and over the past year, with the proportion of income required to meet rent payments increasing by 0.4 percentage point to 23.7%. This is mainly attributed to the increase in rents in several capital cities.
Kelly said banks could do more to further improve affordability by passing on full interest cuts and helping even more Australians buy homes.