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First Home Buyer Numbers Have Halved Is It Time To Swoop In?

First Home Buyer Numbers Halves in time | Zippy Financial

Repeated cash rate hikes have put many first home buyer plans on hold, so could you swoop in and reap the benefits with less competition in the market?

From May to December the RBA lifted the cash rate from 0.10% to 3.10%. This has no doubt hit many mortgage holders hard, but it has also pumped the brakes in the number of first home buyers looking to enter the property market.

Current Australian Bureau of Statistics data shows that the number of first home buyers has fallen from 3.2% to 8,576 in October alone. That is almost half the 16,187 first home buyers who entered the market in January 2021.

So, if you are looking to buy, how can this benefit you?

Less Competition and More Bargaining Power

From mid 2020 to end of 2021, we saw a house buying frenzy. And house hunters who were unable to compete had to make do with the leftovers. But fewer buyers on the market means that there is less of a chance you will have to duke it out for a chosen property. There could also be more favourable homes for you to choose form, without the overcrowded open houses. 

With fewer buyers making offers, sellers could have concerns about offloading their property. 

CoreLogic data from November 2022 shows the median days a property sits on the market is 35 days, compared to 20 days in 2021. 

So, if you have your financial ducks in a row and are prepared to negotiate, flex that bargaining power and try for a great price.

Softening Property Prices

High demand in recent years saw property reach eye-watering prices, but over the past three months, there has been a decline around most parts of the country (except for regional South Australia and regional Western Australia). 

National data has shown the biggest annual decline in home values since 2019, with a 3.2% drop over the past year. 

In some instances, it could be cheaper to buy than rent. National median weekly rental prices rose by 4.3% in September 2022, which is a record-breaking price hike. And a recent analysis found that for 518 Australian suburbs, home loan payments were more affordable than renting.

Escaping the rent crunch and buying your first home in an opportune area could be a smooth move if your finances are in a decent shape. And you might want to get the ball rolling sooner rather than later. That is because prices could go up again as early as next year if the RBA pauses rate rises and inflation drops, according to SQM Research’s Housing Boom and Bust Report for 2023

Government Schemes for Savings

Taking advantage of the government incentives puts the keys in first home buyers hands on average 4 to 4.5 years quicker.

Giving lenders mortgage insurance the big swerve, paired with a low deposit of 5% is an enticing deal. And if you are eligible, that is what the government’s First Home Guarantee can offer. Spots are limited and have historically been snapped up quickly. But with fewer first home buyers entering the market, you may have more of a chance of nabbing a spot in this scheme. 

Frequently Asked Questions

Why have the numbers of first home buyers decreased recently?

The number of first home buyers has decreased due to repeated cash rate hikes by the Reserve Bank of Australia (RBA). From May to December, the RBA lifted the cash rate from 0.10% to 3.10%, making it more challenging for first-time buyers to enter the market.

How does the decrease in first home buyers benefit potential buyers?

The decrease in first home buyers means less competition in the property market. This gives potential buyers more bargaining power and a better chance to negotiate favorable prices.

What has been the impact on property prices?

Property prices have softened in most parts of the country over the past three months, except for regional South Australia and regional Western Australia.

Is it cheaper to buy than to rent now?

National median weekly rental prices rose by 4.3% in September 2022, making it potentially cheaper to buy than rent in some areas.

Are there any government schemes to help first home buyers?

Yes, the government's First Home Guarantee can offer mortgage insurance waivers and low deposits of 5% to eligible first home buyers.

What should I do if I'm ready to buy a home?

If you're ready to buy, it's advisable to consult with a mortgage broker to understand your borrowing capacity and mortgage options. This will help you make an informed decision and potentially get a better deal.

Find out more

If you are ready to make the big leap towards home ownership, then give us a call. We have got the know-how to help you work out your borrowing capacity and your mortgage options. We will take the confusion out of financing your new home, so that you can get on with swooping in on the house of your dreams.

Phone: 1300 855 022


Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business. 

About the Author:   

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.   

Connect with Louisa on Linkedin.   

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).    

Disclaimer:This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.  


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