It’s certainly been an interesting year for the property market in Victoria in general, and for first home buyers in particular. After several years of growing commentary on the affordability challenges that many first home buyers were facing, we’ve seen increased government incentives and decreased competition from investors resulting in a growth in the number of Australians successfully entering the property market for the first time.
So, whether you are currently in the market for your first home, you have a friend or family-member who is in this situation, or you own a property that might suit one of these buyers when the time comes to sell, we thought this might be an ideal time to look at the latest data on the first home buyers market.
This is a particularly good time to study these numbers, as the Australian Bureau of Statistics (ABS) has publicly admitted that there were issues with the accuracy of first home buyer statistics from 2012 to 2016. This was due, at least in part, to some lenders only reporting loans to first home buyers who received a First Home Owner Grant. This meant that buyers who did not qualify for the Grant, including those who bought their first home but who rented it out rather than moving straight into it, were not counted in the ABS statistics.
This anomaly is particularly relevant given that a recent survey by the Property Investment Professionals of Australia found that as many as 36% of first home buyers chose to rent out their first property and continue renting elsewhere, rather than moving in…a practice known as ‘Rentvesting’.
Indeed, the most recent figures from the ABS show that as many as 18% of all property loans approved in September this year went to first home buyers.
Another interesting statistic is that despite substantial Government incentives to encourage first home buyers to purchase a new dwelling, a large majority still choose to purchase an existing property. The survey found that around 83% of first-timers bought an existing property compared with just 14% buying brand new or off-the-plan.
Of course, whether you are buying or selling in the first home market, one of the most important investments you can make is to gather lots of experienced advice before you make a move.
If you have any questions about the end-of-year property market, don’t hesitate to give the team at Ian Reid Vendor Advocates a call on 9430 0000. You can also get a FREE copy of our booklet, Fatal Real Estate Traps Exposed, while you’re here on our website.