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New findings suggest that rising property prices and negative media about home finance markets are scaring young Australians away from entering the property market.
According to fresh figures from online property agency iBuyNew, the proportion of first home buyers aged 25 to 35 fell from 55 per cent of the sector at the end of the 2015-16 financial year, to 40 per cent by 30 June, 2016.
This comes after the Australian Bureau of Statistics found that the percentage of owner-occupier loans to first home buyers has fallen to a 12-year low, dropping from 14.4 per cent in April to 13.9 per cent in May 2016.
iBuyNew CEO Mark Mendel has attributed the decline to a combination of rising property prices and negative media about the real estate and home finance markets.
“Despite record-low interest rates, the first-time buyer sector has collapsed,” Mr Mendel said.
“Even though property is very affordable with interest rates set to stay at historical lows, young Australians have been put off entering the market,” he remarked.
“It’s an issue for state and federal governments, with the current schemes to entice first home buyers out of the rental market either out of date or ineffective.”
Mr Mendel commented that confidence may be injected into the sector during the second half of 2016, with the federal election result now clear.
“A recent survey we conducted found that while the majority of people weren’t deterred from purchasing property by the election, a lot of people wanted to await the outcome,” he said.
[Related: FHB property fears uncovered]
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