First-home buyers flee the market as house prices continue to rise
The number of first-home buyers cratered in July as house prices continued to soar, according to data from the Australian Bureau of Statistics.
The number of first-home buyers fell 6.8% in July, with the level of commitments plummeting by 20% since the beginning of 2021, the ABS found.
“This is still 20% higher than the previous year; however, the removal of HomeBuilder could see further reductions,” said Adrian Kelly, president of the Real Estate Institute of Australia. “The largest fall was seen in Victoria, followed by Queensland and New South Wales – and it is likely these states will experience further falls as lockdowns continue to impact on the market.”
While the ABS data reflected first-home buyers fleeing the market, borrowers refinancing between lenders hit an all-time high, 60% higher in July than a year prior.
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Investors are also re-entering the market, Kelly said.
“Demand from investors continues to dominate, with this sector seeing continued strong growth over the past year, almost doubling in value,” Kelly said. “Investors re-entering the market is a very good thing for private rentals and overall confidence in the economy, but the end of first-home buyer housing stimulus programs introduced with the onset of the COVID-19 pandemic is a strong factor in these figures.”
