The number of first home buyers in the market has contracted sharply.
According to the latest Adelaide Bank and Real Estate Institute of Australia Housing Affordability index, they represent now just over one out of 10 homeowners.
First home buyer financial commitments fell to 13.1 per cent of total owner-occupied housing in September.
This is the lowest figure since the ABS series kicked off in June 1991. It compares to an average of 18.5 per cent over the period.
“With the average loan sizes continuing to rise REIA is concerned that the proportion may fall even further in the coming quarters,’’ Real Estate Institute of Australia president Neville Sanders said.
He said the figures showed monthly loan repayments increased by 0.1 percentage points. This was at the lower end over the last seven years.
The problem, however, was the size of the mortgages.
“Unfortunately, historically low interest rates were unable to offset the increasing size of mortgages resulting in the rise in the proportion of the median family income required to meet average monthly loan repayments,’’ Mr Sanders said.
The data shows affordability improved in Victoria, South Australia, the Northern Territory and the Australian Capital Territory.
New South Wales remains the least affordable state or territory for home buyers.
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