The general unaffordability of Sydney homes is making first home buyers consider leaving the capital in the fears of facing a lifetime of renting.
According to Monash University demographer Bob Birrell, the lack of affordable housing for lower income earners and first home buyers has a huge social cost.
"It's moving a big chunk of the next generation out of home ownership, (which has) significant long-term implications for their financial well-being," he said.
Even homes located on Sydney's fringes cannot be considered affordable. "More (first home buyers) have to accept apartment living, staying at home longer, or looking outside of Sydney. The endgame is not clear," Birrell said.
Daniel Cohen, co-founder of First Home Buyers Australia, said that the main issue for young home buyers remains to be saving for a deposit and its associated purchasing costs. Though he believes that the recent declines in Sydney's median price and a slowing market "will definitely help more first home buyers get their foot into the door," they also "need more assistance than just a slowing market." He suggested that the government should consider scaling back negative gearing and re-introducing grants and First Home Savers Accounts for first home buyers.
According to data from the Australian Bureau of Statistics, NSW first time buyer activity doubled when the First Home Owners Grant was increased in late 2008. As much as 6,150 homes were financed by May 2009.
At present, however, the number of first home buyers have shrunk to only a third of their 2009 levels.
Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker