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Drop in first-home buyer numbers

By Dan Sowden

Ray White Maroochydore principal Brett Graham at a Mountain Creek home, whose $400,000 price-tag, he said, was typical value for money for first-home buyers.

THE number of first-home buyers entering the market on the Sunshine Coast has flatlined.

Coast-based real estate agents have backed up the latest Real Estate Institute of Queensland data, which shows the level of market penetration from first-home buyers is at its lowest level in six years.

Agents blame the worrying trend on the Federal Government’s decision to slash the first-home buyers grant on January 1.

Higher interest rates, increased living costs, higher housing prices and stingier banks were also listed as contributing factors.

The sobering news follows the release of new figures that show housing affordability is at its worst level since 2008.

“First-home buyers are virtually non-existent. There’s very few of them at the moment,” Raine and Horne Nambour principal Diane Thomas said.

“It faded out very quickly after the grant was reduced, and for most of this year there’s been virtually no activity at all.”

The Australia Bureau of Statistics’ March housing finance report shows first-home owners now represent just 13% of Queensland’s total market. The figure is lower than in both NSW and Victoria, where property prices are higher.

“These figures really show how much of a struggle it is for prospective home owners to get into the market in Queensland,” REIQ managing director Dan Molloy said.

“With six rate increases since October, they are really back to where they started, with declining housing affordability all but locking them out of the market.”

Ray White Maroochydore principal Brett Graham said while the number of first-home owners had plummeted on the Sunshine Coast, the boost to the grant meant a lot of people bought in the last half of 2009.

“I’m fairly confident that if you look at the last six months of 2009 and the first six months of 2010, the level of first-home buyers in the market would be about normal,” the REIQ Sunshine Coast zone chairman said.

Mr Graham added that a lot of investors, who did not want to compete against first-home buyers, had now re-entered the market.

Stockdale and Leggo Landsborough principal Chris Oldfield called on the Rudd government to resurrect the full grant.

“I think in itself it would be a great stimulus to the economy,” he said.

Mark Bode | 20th May 2010

Source:  Sunshine Coast Daily

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