New data from the Housing Industry Association suggests 2016 could be a year of opportunity for first homebuyers looking to find a toehold on the property ladder.

Recent figures show new home sales slumped for a third straight month in November, driven by a sharp decline in apartment sales.

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Furthermore, the latest Mortgage Index from the Australian Finance Group (AFG) for the final quarter of 2015 revealed investor lending had fallen from 40 per cent of all loans early in the year to 31 per cent in the last quarter.

It has prompted many property pundits to declare that the relentless upward trajectory of our capital city markets is over, with prices flattening or falling in all markets except Sydney (which many predict will follow suit).

First, the good news

These are all certainly signs that relief and opportunities are around the corner, according to co-founder of First Home Buyers Australia, Taj Singh.

“Victoria, especially, has a lot of apartments coming onto market until 2017 and this will give first homebuyers more apartments to choose from,” he said.

“The softening of prices across the board will also help.”

Buyer and Vendor Advocate at Amalain Property Group, Michelle Amarant, buys a lot of homes for her Melbourne clients and has noticed a change in the market since winter.

“In winter, there was not much stock on the market so buyers were competing furiously and paying more than they wanted to secure a home,” she said.

“Things have dropped off since and I have noticed quite a few properties which have been sitting on the market for a few months.

“Vendors’ expectations may not have caught up with the market and these properties that have been sitting around for a while can provide opportunities for first homebuyers to buy something now that they would have paid much more for six months ago.”

Now, the bad

While, investors are clearly vacating the market, this has not been met with an uptake in first homebuyer activity.

The ABS figures also showed that first homebuyers as a proportion of the total market hit an 11-year low at 14.9 per cent of all owner-occupied finance commitments.

Melbourne has an apartment boom. Photo: AAP

“This therefore means that first homebuyers require more assistance than a drop in investors buying property,” Mr Singh said.

“Homebuyers have been leaving the market for a combination of reasons over the past 11 years and that is largely due to the fact that prices have been climbing and incentives – in the form of stamp duty cuts – have been declining.”

Furthermore, as new rules restrict lenders on growing their investment lending books, the more wealthy investors are now applying for owner-occupied loans even if they are purchasing the property as an investment, according to Mr Singh.

“The wealthy investors don’t need rent rolls to get owner-occupier loans as they have enough money,” he said.

“These numbers aren’t captured in the investor lending numbers mentioned by the AFG.”

Competition for housing

Ms Amarant also noted that investors were not her only competition at auctions. Depending on the suburb you are looking in, there may be very few, if any, active investors.

“We actually find the downsizers in the $600,000 apartment market are the real competition in some Melbourne suburbs, such as Elwood and Prahran,” she said.

It’s still tough for first homebuyers. Photo: AAP

“Whereas in Glen Waverley it is the foreign investors. It really does depend on what suburb you are in.”

This does not mean first homebuyers should throw their hands in the air and declare it all too hard.

“There are always opportunities in any market and the key is to adjust your expectations,” she said.

“We find a lot of our clients want a house straight away but that is not what their parents had, so sometimes they need to get into the market with an apartment and upgrade later.”

Ms Amarant added that first homebuyers should factor in a rate rise of a couple of percentage points, as well, as they were unlikely to stay so low.