First home buyers have always been a vital cog in the health of any property market, but claims that they are struggling to get on the ladder are not supported by official statistics, according to the Property Investment Professionals of Australia (PIPA).
Australian Bureau of Statistics (ABS) data shows the percentage of first home owners in the market is higher than the historical average.
According to the latest data from the ABS, the percentage of properties financed to first home owners was 17.9 per cent in January this year.
Over 2018, the average percentage of properties financed to first home owners was also 17.9 per cent, which was slightly higher than the 10-year average of 17.6 per cent.
PIPA chair Peter Koulizos said that property tax changes proposed by the federal Opposition were seemingly developed to help first home buyers into the market, but these figures showed they were already active.
“The proposed changes may have the desired effect in improving housing affordability, but at what cost?” Mr Koulizos said.
“Housing will become more affordable because house prices will drop.
“Why does the ALP want to make housing more affordable for potential first home buyers by causing residential property prices to fall all over the country?
“Why do they want to negatively affect 100 per cent of the property market?”
While first home buyer activity was certainly within a healthy range, Mr Koulizos said that there were other ways to assist first-timers in the capital city markets in particular.
“I truly believe that first home buyers must get assistance to get into the property market because it is good for them, good for the property market, good for the economy and good for the whole community.
“However, there are better ways to assist first-timers than causing everyone’s property price to drop to seemingly make it cheaper and easier for them to get into the market.”
One of these ways would be to change the First Home Owner Grant (FHOG) which has been limited to new properties for a number of years now, however, PIPA research shows that 80 per cent of first-timers buy established dwellings, likewise, only a small percentage of all properties are new.
“While restricting the grant to new properties was no doubt a strategy to assist the construction sector, it is very difficult to make housing more affordable for all when you are only focusing on just two per cent of all properties,” Mr Koulizos said.
“State governments should extend the FHOG to include established properties, so we are not forcing first home buyers to buy new dwellings, which are generally found on the urban fringes or new units, which tend to be tiny apartments.
“It’s unfair that first home buyers are almost being forced to buy a new property, which history shows us also won’t grow as much in value as an existing one.”
Dean Webster, Surf Coast Times, 4 April 2019