Most first home buyers worry housing is too pricey, reveals study

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Over 80% of first home buyers (FHB) planning to purchase a home within the next two years believe housing is unaffordable in their state, according to an annual survey conducted by Mortgage Choice.

The survey discovered that the issue of unaffordable properties was more predominant in certain states than others.

“The percentage of first home buyers who consider housing to be unaffordable is significantly higher in New South Wales and Victoria than it is in Queensland and South Australia,” said John Flavell, Mortgage Choice chief executive officer.

Among the capitals, New South Wales has the most FHBs disheartened by high property prices, with 86.9% of respondents admitting so in the survey. Victoria came in second with 85.7%.

On the other hand, South Australia and Queensland had the smallest percentages of dissatisfied FHBs, at 76.8% and 75.4%, respectively.

Flavell offered an explanation to New South Wales and Victoria’s high dissatisfaction among FHBs.

“Over the last 12 months, dwelling values in the capital cities of New South Wales and Victoria have climbed dramatically.

In Sydney, property prices have grown by 15.6%, taking the median dwelling price to $800,000, while in Melbourne, property values have risen by 12.8%, giving the capital city a median dwelling value of $600,000.”

He also noted that in some capital cities, such as Queensland, South Australia, and Western Australia, property prices increased by far less.

According to the survey, the average home loan swelled by 18.5% in the two years to April 2015, from $301,800 up to $357,500.

The average full-time wage marginally increased by just 3.6%, from $77,225 to $80,054, in comparison.

As a result, the average home loan size is now about 4.5 times bigger than the average wage—up 25% in the last two years.
 

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