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First home buyers undeterred by rising mortgage pressures

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Reporter 5 minute read

First home buyers have been active in the property market, despite a rise in mortgage repayments in proportion to income, according to new data.

The proportion of median family income required to service a mortgage has increased by 1.6 per cent nationally to 36.1 per cent over the December quarter, according to the Adelaide Bank/Real Estate Institute of Australia Housing Affordability Report. 

However, the report also indicates that, with the exception of Western Australia, first home buyers (FHBs) were active across the country, with almost 31,000 FHBs entering the housing market in the December quarter, an increase of 6.8 per cent from the previous quarter and 32.6 per cent year-on-year. 

Victorian FHBs were most active, with the number of loans issued to new entrants rising by 12.6 per cent (9,892), a 39.7 per cent year-on-year increase. FHBs now make up 28.2 per cent of the state’s owner-occupier market.


Increased activity from FHBs was also evident in NSW, with a 10.9 per cent (7,507) rise in loans issued to newcomers in the state’s housing market, a 74.9 per cent increase year-on-year, with FHBs making up 21.3 per cent of the owner-occupier space. However, in the same quarter, the proportion of income needed to meet home loan repayments jumped by 1.7 per cent, a 37.8 per cent year-on-year increase. 

Queenslanders required less of their income to service their mortgage over the December quarter, with a 0.8 per cent drop to 27.6 per cent. FHBs were also active in the state, representing 27.0 per cent of the owner-occupier space. 

The proportion of income required to service a mortgage in South Australia also rose by 1.1 per cent to 26.4 per cent. FHB activity in the state, however, increased by 0.5 per cent to 19.7 per cent of the overall owner-occupier market. 

Tasmanian housing affordability has taken a hit, amid a rise in housing market activity in the state, with the proportion of income required to pay down a home loan rising by 2.4 per cent to 25.7 per cent. FHB activity rose, increasing by 4.0 per cent over the quarter, a 14.5 per cent year-on-year jump. 

FHBs in Western Australia struggled to enter the market, with activity dropping by 9.8 per cent, despite a 4.9 per cent year-on-year increase. Western Australians also required more of their income to service their mortgage, with a 1.5 per cent rise to 23.9 per cent.  


The proportion of income required to service a mortgage in Australia’s capital also increased by 1.1 per cent to 19.6 per cent. Housing affordability in the Northern Territory also declined, with the proportion of income required to meet loan repayments rising by 1.5 per cent to 20.9 per cent.

[Related: FHB grants ‘make housing less affordable’, says ACT Chief Minister]

First home buyers undeterred by rising mortgage pressures
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