ABCDiamond

The average first home buyer in Australia was, in February 2011, having to arrange an average mortgage of $277,000 for their property purchase.

This has dropped from the average first home buyers mortgage of $281,600 a year ago in February 2010, and is also slightly lower than it was in February 2009.

This $277,000 average first home buyers mortgage is 2.07 times the average income for a couple both working full time.

Even if the couple were only on 50% of the average income, it is still only 4.14 times the income. In 1995 that would have been a multiple of 2.68.

The numbers of mortgages for First Home buyers is also dropping back to normal levels, with 14.9% of February loans being issued to First Home buyers, similar to 2003-2005 when it averaged 14.76%. The year 2009 was definitely the exception with its 26.8%.

bcworld

The author of the attached text would be giving the whole picture if they actually explained why the multiples are so different compared to the other ones people hear...the 7, 8, 9s etc.

asprilla

I believe (but I don't have the figures at hand) that the number of new loans being written for 1st home buyers, is also very low.

why is the size of the home loan dropping ? and why aren't many people buying?

I think that the reasons are pretty obvious, and they all come down to affordability.

>> cost of living essentials (not including housing) has increased significantly over the past 10yrs, faster than wage growth. This puts pressure on the amount of $$$ available to service a loan.

>> interest rates have risen from their recent low levels, making homeloans less attractive.

>> the belief that there will be more interest rate rises to come.

>> the belief that the cost of living will continue to increase.

>> problems with the domestic "2-speed" economy

Steve2009

Like Asprilla, I would suspect that the number of loans has decreased quite considerably.

Is there a "buyers strike"? I couldn't say.

FYI, a buyer strike is usually more of a disconnect between the two sides of a market than any orchestrated movement, as far as I am aware.

IvanM

The average loan size compared to the Sydney house price shows the imbalance of the current situation. Big Bazza is about to release a lot of land so prices out west are likely to see a lot of strain.

The 10% reduction in NSW housing finance was also a big suprise.

A buyers strike makes good news. Buyers will buy when the price is right.

ABCDiamond

First home buyers in 2003-2004 were 14.6% of all loans
First home buyers in 2010-2011 were 16.3% of all loans

First home buyers - Dwellings financed (no.) ;

Jan-2010 8,309
Feb-2010 8,504
Mar-2010 8,708
Apr-2010 7,532
May-2010 8,098
Jun-2010 7,853
Jul-2010 7,655
Aug-2010 7,460
Sep-2010 7,654
Oct-2010 7,299
Nov-2010 8,363
Dec-2010 8,515
Jan-2011 5,834
Feb-2011 6,351
Mar-2011 8,087
Apr-2011 7,020
2010-2011 Total 16.3% of all Loans


Compared to the pre-boom time (2009 was 25.93%)

Jan-2003 7,214
Feb-2003 7,820
Mar-2003 8,503
Apr-2003 7,904
May-2003 8,485
Jun-2003 7,768
Jul-2003 8,525
Aug-2003 7,965
Sep-2003 8,271
Oct-2003 8,505
Nov-2003 7,561
Dec-2003 7,653
Jan-2004 5,668
Feb-2004 6,045
Mar-2004 7,124
Apr-2004 6,414
May-2004 7,184
Jun-2004 7,485
Jul-2004 7,892
Aug-2004 8,227
Sep-2004 8,330
Oct-2004 7,842
Nov-2004 8,920
Dec-2004 8,898
2003-2004 Total 14.6% of all Loans

Amazulu

Welcome back ABCD - with a typical post for you!

fish.01

I can do that...the 7, 8, 9's were crap They divided the average home price into the average income and represented that as the reality of what people were doing. This totally ignored the fact that people with little deposit don't buy the average priced house but instead a starter house. It also didn't take into account any deposit they may have saved/inherited/been given.

Conversely people buying close to the centre of the big cities will have higher multiples than this country wide average.

fish.01

Welcome back ABC...missed you

Rambi

I hope you didn't spend 2 months working on that question and answer.

Welcome back. Hopefully the tag-team will give you some breathing room

iamthecreaturefromuranus

Oi !! Who let you in?