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June 11, 2016
It's not a pretty picture for first home buyers painted by the recent statistics.
It's a case of the perenial carrot that is dangled before its
New analysis shows the average loan for a first-home buyer has increased by 50 per cent in the last 10 years, with one state recording a 66 per cent increase.
Australian Bureau of Statistics data suggest that the amount people were borrowing to buy their first home had increased with frightening rapidity.
In the past 10 years, the loan size for FHB has increased from $221,100 to $330,600.
According to the Business Insider:
In an outcome that will do little to dispel the view that the Reserve Bank of Australia will follow up its May rate cut with another in the months ahead, Australian wage growth continued to slide in the first three months of the year, falling to the lowest level seen since at least 1998.
According to the Australian Bureau of Statistics wage price index — a measure on salary and wage movements among Australian workers — wages increased by just 0.4% during the March quarter, leaving the annual rate of growth at 2.07% after seasonal adjustments.
Markets had expected a quarterly increase of 0.4%, leaving the annual rate unchanged at 2.2%.
It was the lowest annual increase since the survey first began in 1998, and suggests that wages are now growing at the slowest pace seen since at least the 1990s recession.
According to the ABS, wages for the private sector — the largest employer in Australia — grew by just 0.4%, leaving the annual rate of growth at 1.91%, again a record low.
Those in the public sector saw their wages increase by 0.5% compared to the prior quarter, seeing the annual gain moderate to 2.46%.
Labor MP Andrew Leigh noted on Q&A recently that buying a house now costs 15 times the average income of young people.
“In the early 1990s, buying a house in a big Australian city cost five times the average young Australian’s income, now it’s up to 15 times,” Mr Leigh said.
The Coalition has also come under fire for not doing more to help, and the Prime Minister’s comments that parents should help their children to buy a house, fell flat.
STATE BY STATE BREAKDOWN
The average loan size for a first-home buyer increased in April 2016
NSW: 51 per cent increase from $258,700 to $391,900
VIC: 58 per cent increase from $209,900, to $331,500
QLD: 36 per cent increase from $214,500, to $290,800
SA: 56 per cent increase from $173,500, to $271,400
WA: 62 per cent increase from $197,000, to $321,100
TAS: 41 per cent increase from $165,400, to $233,900
NT: 66 per cent increase from $187,900, to $312,300
ACT: 38 per cent increase from $236,600, to $326,400
So what does all this mean for the ever frustrated and despondent first home buyer…more frustration and despondency of course, with little respite from the treadmill of trying to catch up for the deposit that is never enough.
If you haven’t considered home co-ownership then you have shut your eyes, ears and mind to a realistic path into home ownership. It is an option for a savvy FHB. Find someone who wants home ownership as much as you do team up and buy. This will guarantee you an entry into the market; it’s a no brainer if you take the precautions such as a contract, at the beginning of the process to secure your success. Get off your butts and give some serious thought to a strategy that will be your first step to creating a secure future for you and eventually, your family.
Home Addressed is the place to go to find your future co-buyer. Go to the Co-ownership section and sign up for free, then start looking!