Home loan data from the Australian Bureau of Statistics shows first-time buyers are borrowing more… Prudent lending standards more important than helping FHB: RBA
First-time buyers borrowing more
First-home buyers are not giving up their dream of home ownership despite rising prices, with data released Friday showing they are borrowing more than ever to secure a home.
Home loan data from the Australian Bureau of Statistics shows first-home buyers took out an average loan of $340,200 in June – the highest on record and up 10.2 per cent ($31,600) on last year. Five years ago that figure was $287,900.
Domain Group senior economist Andrew Wilson said the overall 6.8 per cent quarterly jump in first-home buyer commitments could be "an early sign of improvement".
Even so, first-home buyers as a proportion of all loans were likely to keep falling, he said, due to the "extraordinary growth of investors’ numbers".
"It's going to be a much longer journey for first-home buyers, especially to get into that Sydney market."
Prudent lending standards more important than helping FHB: RBA
Ensuring financial stability is more important, in a low interest rate environment, than helping first home buyers into the property market, the Reserve Bank of Australia has claimed. Speaking to the House of Representatives Standing Committee on Economics Inquiry into Home Ownership, the RBA’s head of financial stability department, Luci Ellis recognises the importance of home ownership.
“Outright home ownership is widely regarded as key to avoiding poverty in old age. Before that life stage, home ownership is also regarded as a way to obtain the security of tenure that is so important to the wellbeing of many households…” Ellis said. Ellis then goes on to recognise housing unaffordability despite the importance of home ownership.
“Whether home ownership is affordable depends on one's definition and is open to debate. But there is no disputing that housing is expensive,” she said.
“It is clear that part of the reason for this is that demand is strong... More recently, demand has been boosted by population growth and by declines in interest rates.”
First-home buyers are not giving up their dream of home ownership despite rising prices, with data released Friday showing they are borrowing more than ever to secure a home.
Home loan data from the Australian Bureau of Statistics shows first-home buyers took out an average loan of $340,200 in June – the highest on record and up 10.2 per cent ($31,600) on last year. Five years ago that figure was $287,900.
Domain Group senior economist Andrew Wilson said the overall 6.8 per cent quarterly jump in first-home buyer commitments could be "an early sign of improvement".
Even so, first-home buyers as a proportion of all loans were likely to keep falling, he said, due to the "extraordinary growth of investors’ numbers".
"It's going to be a much longer journey for first-home buyers, especially to get into that Sydney market."
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Prudent lending standards more important than helping FHB: RBA
Ensuring financial stability is more important, in a low interest rate environment, than helping first home buyers into the property market, the Reserve Bank of Australia has claimed. Speaking to the House of Representatives Standing Committee on Economics Inquiry into Home Ownership, the RBA’s head of financial stability department, Luci Ellis recognises the importance of home ownership.
“Outright home ownership is widely regarded as key to avoiding poverty in old age. Before that life stage, home ownership is also regarded as a way to obtain the security of tenure that is so important to the wellbeing of many households…” Ellis said. Ellis then goes on to recognise housing unaffordability despite the importance of home ownership.
“Whether home ownership is affordable depends on one's definition and is open to debate. But there is no disputing that housing is expensive,” she said.
“It is clear that part of the reason for this is that demand is strong... More recently, demand has been boosted by population growth and by declines in interest rates.”
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