Property market faces 'atrocious' hit
The number of first-time buyers entering the market fell to its lowest level in two years in January, according to the latest figures from the Australian Bureau of Statistics.
The 11 per cent drop at the national level marked the fourth consecutive monthly decline for what is considered to be one of the most influential segments underpinning the overall health of the property market.
MacroBusiness economist Leith van Onselen said the first home buyer figures were "atrocious", especially coming during a low interest rate environment and recent price falls. "It's surprising that it's fallen off this much and so consistently," he said.
In contrast, the ABS found the value of finance commitments for investors rose strongly over the month, and are now up 19 per cent in the last year.
"Young first home buyers are leaving the market but baby boomer investors are entering the market. There's a recovery going on but it's built on investor demand," Mr van Onselen said. "It's generally not great for sustainability when young people are not getting in. It's sort of uncharted territory."
In Victoria, where the grant for new homes was withdrawn in the middle of last year, the decline was 22 per cent over the past four months.