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03-12-2014, 10:57 PM
First-home buyer numbers hit record low
THE AUSTRALIAN DECEMBER 04, 2014 12:00AM
Michael Bennet
Reporter
Sydney
THE crisis facing first-home buyers in Sydney and Melbourne’s hot housing markets is showing no signs of letting up, with a major mortgage broker revealing newcomer numbers have slumped to a record low in NSW.
As debate rages over the accuracy of data on first-home buyers, mortgage brokers AFG yesterday said they made up fewer than one in 50 new borrowers, or 1.9 per cent, in NSW last month.
AFG’s tally also fell to record lows in Victoria and South Australia. However, confirming the variability across the country, first-home buyers rose in Queensland to 5.2 per cent and 19.1 per cent in Western Australia.
Regulators are concerned about concentration risks in Sydney, and to a lesser extent Melbourne, and AFG’s data is unlikely to ease their worries, with home loans to investors in NSW at 50.9 per cent of flows last month.
That aligns with official data showing investor lending up 10 per cent in the past year, the strongest in more than six years, which may prompt regulators to install rules on banks to cool the more speculative end of the market.
But there have been queries surrounding the flows, with Macquarie analysts arguing many first-home buyers were purchasing affordable investment properties, thus showing up as investors.
Deutsche Bank strategist Tim Baker said parents might be signing for loans on behalf of their children. He, however, said confidence was low amid soft employment and wages growth and new buyers missing out on rising asset prices in recent years.
He said this could be seen because buying was relatively cheap to renting compared with the past 25 years and saving for a deposit still took about a year’s income.
AFG pointed the finger at the axing of first-home buyer grants in most states except WA.
THE AUSTRALIAN DECEMBER 04, 2014 12:00AM
Michael Bennet
Reporter
Sydney
THE crisis facing first-home buyers in Sydney and Melbourne’s hot housing markets is showing no signs of letting up, with a major mortgage broker revealing newcomer numbers have slumped to a record low in NSW.
As debate rages over the accuracy of data on first-home buyers, mortgage brokers AFG yesterday said they made up fewer than one in 50 new borrowers, or 1.9 per cent, in NSW last month.
AFG’s tally also fell to record lows in Victoria and South Australia. However, confirming the variability across the country, first-home buyers rose in Queensland to 5.2 per cent and 19.1 per cent in Western Australia.
Regulators are concerned about concentration risks in Sydney, and to a lesser extent Melbourne, and AFG’s data is unlikely to ease their worries, with home loans to investors in NSW at 50.9 per cent of flows last month.
That aligns with official data showing investor lending up 10 per cent in the past year, the strongest in more than six years, which may prompt regulators to install rules on banks to cool the more speculative end of the market.
But there have been queries surrounding the flows, with Macquarie analysts arguing many first-home buyers were purchasing affordable investment properties, thus showing up as investors.
Deutsche Bank strategist Tim Baker said parents might be signing for loans on behalf of their children. He, however, said confidence was low amid soft employment and wages growth and new buyers missing out on rising asset prices in recent years.
He said this could be seen because buying was relatively cheap to renting compared with the past 25 years and saving for a deposit still took about a year’s income.
AFG pointed the finger at the axing of first-home buyer grants in most states except WA.