A record number of first-home buyers has left the market, survey finds
The strict new lending rules have resulted in the exodus of first-home buyers from the housing market, a new survey has suggested.
A record net 65% of real estate agents reported seeing fewer first-home buyers in the market in January, according to the latest survey by Tony Alexander and the Real Estate Institute.
In the survey report, the independent economist said that while the government’s March 23 announcement of new investor tax policies prompted many investors to step back from buying, the CCCFA changes had discouraged even willing and well-capitalised first-home buyers and older people from making purchases, Stuff reported.
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The figure continued a downward trend in the December survey, where a net 56% of agents said they were seeing fewer young buyers. Since then, however, changes to the CCCFA had come into effect, resulting in a tougher lending market.
The law change plus rising mortgage rates meant the proportion of mortgage applications converted into new home loans dropped to 27% in January, from 39% in October 2021, the latest Centrix figures showed.
“First-home buyer presence has collapsed from November after showing little change for virtually all of last year,” Alexander said.
The survey also reported that investor presence in the market remained down, with a net 57% of agents reporting seeing fewer investors wanting to buy a property – a slight increase from the net 63% in April and May last year.
A record 89% of agents said a key concern of buyers was the inability to get finance, while 69% said it was about interest rates.
A record number of agents also reported seeing fewer people at the auctions (at net 59%) and lower attendance at open homes (at net 64%).
Meanwhile, buyers’ fear of missing out had fallen to a record low, with only a gross 20% of agents reporting seeing it in buyers – down from the 70% in late October and well below the average of 66% since April 2020.
Alexander said agents reported buyers felt far less urgency and that many were not in a position to buy because the new lending rules meant they were unable to secure bank financing, Stuff reported.
