The first buyers give up the dream | Liverpool City Champion


Australians seem to be giving up on dreams of owning their first home at a time when house prices rose more than 20 percent last year – the biggest increase since mid-1989.

New figures show first-time home loan demand plummeted for a seventh consecutive month, falling 3% in August to 2.1% lower than a year earlier – the first annual decline In two years.

Separate data released on Friday also suggests that deteriorating affordability is holding back growth in house prices.

While the National CoreLogic Home Value Index rose an additional 1.5% in September, it is just over half of the rate reached in March.

CoreLogic Research Director Tim Lawless believes the slowing growing conditions are the result of higher entry barriers for non-owners as well as fewer government incentives to enter the market.

“With home values ​​growing much faster than household incomes, it has become more difficult for most market cohorts, especially first-time home buyers, to raise a deposit,” Lawless said.

With the median home price in Sydney now exceeding $ 1 million, a buyer would need to raise at least $ 200,000 for a 20% deposit.

Prices in Sydney have risen 26.5% in the past year, but the biggest annual gains among capital cities have been in Hobart, up 32.5%, and Canberra, up 29% .

Overall, the Australian Bureau of Statistics said mortgage lending fell 4.3% in August, led by a 6.6% drop among homeowners, the biggest drop since May 2020.

Homeowner loans were still 34 percent higher than a year earlier.

In contrast, home loans from investors rose 1.5% in the month, 92% more than a year earlier.

The figures come a week when the Board of Financial Regulators warned that while lending standards have not deteriorated, it fears indebted households will put the economy at risk in the future.

“We remain of the view that Australian regulators are increasingly uncomfortable with the dynamics of the housing market and we expect the Australian Prudential Regulation Authority (APRA) to announce further macro-prudential measures. over the next few quarters, ”JP Morgan economist Tom Kennedy said.

Meanwhile, Australia’s manufacturing sector was barely growing in September as border closures and coronavirus lockdowns continued to stifle activity.

The performance of the Australian Industry Group manufacturing index fell 0.4 points to 51.2, remaining just above the 50 level that separates sector growth from contraction.

Ai Group chief executive Innes Willox said the strong recovery from late 2020 was virtually stalled due to lockdowns in the country’s two largest states, NSW and Victoria.

“While sales and employment were both down in September, there are bright spots on the horizon with new orders continuing to expand and production and finished stocks increasing at a faster rate than ‘in August, “said Willox.

“Manufacturers are hopeful that the prospect of removing restrictions will lead to a big increase in performance over the next few months.”

Associated Australian Press

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