First home buyers are staying out of the Queensland and NSW property markets, new data has revealed.
According to the latest AFG Mortgage Index, the mortgage broker aggregator arranged just 96 home loans worth $31 million for first home buyers in Queensland, compared with 265 mortgages worth $79 million the month before.
This reflects a similar trend in NSW where in both October and November the company arranged fewer than half the 219 home loans worth $83 million in September.
The result comes despite a recent improvement in housing affordability. The latest HIA-CBA Housing Affordability Index increased by 5.3 per cent in the September 2012 quarter to be up by 15 per cent compared to the same quarter in 2011.
"This is the seventh consecutive quarter where we have seen an improvement in the headline affordability index," HIA chief economist Harley Dale said.
State governments in both NSW and Queensland have withdrawn $7,000 first home buyer grants in the past two months.
The proportion of AFG’s home loans arranged for first home buyers has slumped in Queensland from levels at around 15 per cent, in the months leading up to the end of the first home buyers grant, to just 5.5 per cent.
In NSW, first home buyers comprised 13 per cent of new home loans up till September, dropping to 5.7 per cent in October and 5.4 per cent in November. By contrast, WA leads the country in the first home buyers market with 23.6 per cent of all new home loans arranged for them, AFG said.
“This trend is both significant and very concerning for the market, going forward,” AFG’s general manager of sales and operations, Mark Hewitt, said. “First home buyers are the lifeblood of the property market – when activity stagnates at the entry level, it affects everyone up the property chain.
“We could be seeing the transition to a generation of renters unless more is done to help people onto the property ladder.”
In contrast, NSW led the country with 41.1 per cent of all loans in the state arranged for property investors. In Queensland this figure was 33.4 per cent in November.