First home buyers at lowest level for years

Australian Bureau of Statistics figures reveal an increasingly challenging market for first home buyers.

According to the most recent Australian Bureau of Statistics (ABS) Housing Finance figures, the percentage of owner-occupier home loans to first home buyers is currently at a decade low, representing just 13.9% in May this year.

The ABS statistics only account for first home buyers that are classified as owner occupiers, however there may also be some first home buyers that are opting for investment rather than occupation, with a Mortgage Choice survey, released in June, finding an increasing number of young property investors.

First-home-buyers-are-opting-for-investment
New houses under construction in Melbourne, Australia (Photo: ymgerman)

According to the Mortgage Choice 2016 Investor Survey, 50.8% of investors were 34 years of age or younger when they purchased their first investment property. By comparison, in 2013, just 33.8% of investors were under the age of 34 when they bought their first investment.

“With property price growth outpacing wage growth over the last few years, saving a deposit and buying property has become very difficult for a lot of younger Australians,” said Mortgage Choice chief executive officer John Flavell.

Certainly, the ABS housing finance data noted an overall increase of 3.9% in the value of lending to investors, against a fall of 0.6% in lending to owner occupiers.

Currently visitors to CANSTAR’s home loan selector nominate their reasons for comparing home loans as follows:

Source: Canstar.com.au. Figures based on visitors to CANSTAR website that have used the home loan selector tool between May 2015 and May 2016.

 

If you’re currently considering a home loan, the comparison table below displays some of the variable rate home loans on our database with links to lenders’ websites that are available for first home buyers. This table is sorted by Star Rating (highest to lowest), followed by comparison rate (lowest-highest). Products shown are principal and interest home loans available for a loan amount of $350K in NSW with an LVR of 80% of the property value.

Before committing to a particular home loan product, check upfront with your lender and read the applicable loan documentation to confirm whether the terms of the loan meet your needs and repayment capacity. Use Canstar’s home loan selector to view a wider range of home loan products.


*Comparison rate based on loan amount of $150,000 and a term of 25 years. Read the Comparison Rate Warning

CANSTAR advises that the following minimum, maximum and average home loan interest rates, for both owner-occupiers and investors, are as follows:

Table: Residential Home Loan Market – Snapshot of the current market (11/07/2016)
Stat Standard Variable Package Variable 2 Year Fixed 3 Year Fixed 5 Year Fixed
Average 4.58% 4.33% 4.19% 4.23% 4.66%
Min 3.59% 3.74% 3.74% 3.67% 3.99%
Max 5.84% 5.05% 5.09% 5.14% 5.49%
Source: www.canstar.com.au, the search results do not include all home loan providers, and may not include all features relevant to you.
Table: Investment Home Loan Market – Snapshot of the current market (11/07/2016)
Stat Standard Variable Package Variable 2 Year Fixed 3 Year Fixed 5 Year Fixed
Average 4.82% 4.62% 4.44% 4.48% 4.86%
Min 3.79% 4.09% 3.74% 3.69% 4.27%
Max 6.03% 5.15% 5.29% 5.30% 5.61%
Source: www.canstar.com.au, the search results do not include all home loan providers, and may not include all features relevant to you.

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