Baby boomers continue to squeeze out first-timers

First-home buyers continue to be squeezed out of the property market, with their share of home-loan approvals falling to a record low, despite growth in investor activity slowing.

While the home loan market strengthened amid low interest rates in November, as a proportion of total borrowers, first-home buyer activity fell to 12.3 per cent nationally, new figures from the Bureau of Statistics show. The previous low was 12.5 per cent in October.

Sydney auctioneer Will Hampson said the data reflected what he saw at auctions every week: ”We were consistently seeing first-home buyers being outbid with competition from cashed-up baby boomers and overseas buyers.”

Mr Hampson said in Sydney’s inner suburbs many successful first-timers were quite clearly being helped by their parents.

He was expecting the ”Kippers” – kids in parents’ pockets eroding their savings – trend to continue this year. ”This could be the year to help [their kids] out, through using some of the equity in their own homes or going 50-50 on a reasonable deposit.”

The latest figures came as an ANZ survey found job advertisements declined by 0.7 per cent in December, but were stabilising in some states, after an annual drop of 9 per cent.

In NSW, first-home buyer activity remained at 7.4 per cent, just above the record low of 6.8 per cent in September.

Investor finance was up 45 per cent compared to last year, according to October numbers.

Home buyers with a budget of up to $400,000 are being advised to look for apartments in Dee Why or Manly Vale, and for houses at half a million dollars or less, to try western suburbs such as Fairfield, Blacktown, Kings Langley or Quakers Hill.

Yet Starr Partners chief executive Douglas Driscoll, who has 10 offices across Sydney’s west, said even there, first-home buyers were struggling against investors.

”There is an argument to suggest that it is too easy for investors to buy at the moment,” Mr Driscoll said. ”I think 2014 is going to get even worse for first-home buyers, sadly.”

Mr Driscoll advocates the state government bringing back stamp duty concessions to help first-time buyers compete with investors.

”There has even been talk of allowing first-home buyers to use part of their super for a deposit, which should be considered as well,” he said.

Separate figures released by mortgage broker AFG on Monday showed that the number of mortgages it processed in the second-half of last year soared by 18.9 per cent on the back of demand from Sydney investors.

NSW recorded the country’s highest increase at 33 per cent.

”The dearth of first-home buyers in NSW continues to be a long-term concern,” AFG’s sales and operations general manager, Mark Hewitt, said.

The strength of the housing market, coupled with rising prices and the continued boom in residential building approvals meant the Reserve Bank was likely to keep the cash rate on hold this year, economists said.

Story:   Glenda Kwek, Stephen Nicholls, Toby Johnstone     Source:   www.domain.com.au