Finance Property First home buyers face market ‘extinction’

First home buyers face market ‘extinction’

House sold
Experts warn changes to stamp duty may increase house prices. Photo: Getty Photo: Getty
Twitter Facebook Reddit Pinterest Email

A senior banker has likened first home buyers to an endangered species amid deepening concern over the exodus of young adults from the residential property market.

Official data published by the Australian Bureau of Statistics shows that first home buyers bought around one in 10 residential properties sold throughout Australia in the September quarter.

First home buyers purchased only 21,825 of the 166,000 properties sold to owner-occupiers during the quarter.

It’s the lowest level of first home buyer participation in the owner-occupier market since the ABS began publishing data in 1991.

“To give this some perspective, the number of first home buyers for the quarter has dwindled to a figure now equivalent to the number of lions believed to be left in the wild,” Adelaide Bank senior executive Damian Percy said.

A new housing affordability report published by Adelaide Bank and the Real Estate Institute of Australia paints a bleak outlook for aspiring home owners on average incomes.

According to the report, the median house price in Australian capital cities rose by 1.4 per cent in the quarter to a whopping $712,776.

The state of the problem

First home buyers made up just 13.2 per cent of all residential properties sold to owner-occupiers in the September quarter.

The national average has been 18.5 per cent since 1991.

Here’s a breakdown of how first home buyers are faring in each of the states and territories.


Sydney’s property bubble makes NSW the Australian state with the lowest proportion of first home buyers securing properties in the owner-occupier market.

Only 7.9 per cent of housing sales went to first home buyers in the September quarter.


First home buyers are coming under extreme pressure at auctions in Victoria, but declining affordability is having less of an impact.

New entrants accounted for almost 15 per cent of houses and apartments sold during the period.

Queensland homebuyers
Queensland’s first home buyers are among those taking the most risks when it comes to purchasing their first property. Photo: Getty


The percentage of young families buying a house in the Sunshine State appears to be holding up at 16 per cent, despite rising property prices.

However, they are taking on more risk to do it, with the average loan taken out by first home buyers increasing by more than 4 per cent in the quarter.

Western Australia

Property prices in Perth have collapsed since the mining boom began to falter in 2013, making home ownership for young bidders the most achievable in Australia.

The average house price across the state now stands at around $490,000 – well below the national average.

While the number of first home buyers acquiring properties fell significantly in the third quarter, around 20 per cent of all property sales went to new entrants.

South Australia

First home buyers accounted for just 10.3 per cent of the owner-occupier market.


The strike rate for first home buyers is on the rise in Tasmania, where new entrants accounted for 13.4 per cent of the market in the quarter, compared to around 11 per cent during the corresponding period in 2015.

Houses first homebuyers
Canberra is still the cheapest capital city in Australia’s housing market. Photo: Getty


Although Canberra is the most affordable place to buy a home, first home buyers account for only 14.1 per cent of the owner-occupier market.

Northern Territory

More first home buyers are entering the NT market as the number of loans made to new entrants rose 32 per cent compared to the third quarter last year.

First home buyers accounted for 16 per cent of the market.

Investors under pressure

Deakin University academic Adrian Raftery says investment borrowers are likely to come under pressure because the average rental returns are now extremely low due to the price boom.

elephant first homebuyers
Unless housing prices alter dramatically in the near future, young first home buyers may become an endangered species. Photo: AAP

“These days you cannot justify investing in a property on the basis of income returns,” he said.

“Most people seem to banking on more capital growth.”

However, Dr Raftery believes it may take some time for affordability to improve.

“Historically, there’s has been a correlation between rising property prices and declining interest rates,” he said.

“So, when rates begin to rise prices are likely to correct.”

View Comments