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Adverse government policy and growing investor demand are to blame for everyday Australians and first home buyers being priced out of the property market, says one real estate network.
Coronis Realty managing director Andrew Coronis said almost half (45 per cent) of all bank loan approvals in October were granted to investors, with this trend predicted to grow in the face of record low interest rates and favourable financial policies geared towards investors.
Mr Coronis said this combination of factors was creating a market dominated by landlords and renters.
“Home ownership has fallen significantly over the last two decades, with the largest drop of 11 per cent among 35- to 44-year-olds, showing more and more people are resorting to renting,” Mr Coronis said.
“By all accounts, buying a house should be easier than ever before, considering deposits have dropped from 30 per cent to around five per cent and interest rates are at a record low for the 16th month in a row.
“Yet government policies like stamp duty, negative gearing and changes to the First Home Owners Grant have made it even harder for low-income earners and young Australians to get their foot in the door,” he said.
Mr Coronis said since the start of the global financial crisis, 95 per cent of all bank lending has been channeled into real estate, with much of this invested in the residential arm of the market.
“Buying a home gives people a level of financial security and acts as great compulsory savings,” he said.
“We recommend people get into property as early as possible, but with such a competitive landscape, buyers need to look at the bigger picture and get their ducks in a row before entering the market.”
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