On the other hand, costs for new housing in most other cities continued to rise, including in Sydney.
“[The] Sydney housing market remains strong due to increases in the cost of materials and labour and strong demand, which is putting upward pressure on dwelling construction [costs],” the ABS noted in its report.
The report also found that rents in select cities are also falling. Perth, Darwin, Hobart, and Canberra all posted negative contributions to their costs of living. On the other hand, rental costs are rising in Sydney, Melbourne, and Adelaide.
First home buyers are likely to be enticed into purchasing property this year, with the record low variable interest rates and improving affordability of new homes in certain capital cities, said Amanda Watt, head of banking business for act.
“While house prices continue to rise strongly in Sydney, trends have been much more varied elsewhere and the CPI data indicate that new housing costs are in fact going backwards in some locations, in particular in Darwin and Perth which have been hard hit by the commodities downturn. This can only benefit first homebuyers in those cities, who will be welcoming the financial reprieve," Watt stated.
“This will help to stimulate the home loan market, with the level of first-time buyers taking out home loans expected to rise in the second half of 2015 back towards 20% of all new home loans from current levels of around 15% of all new home loans."
Another ABS report detailed that since the 1994-1995 period, the proportion of households that own their home outright declined to 31% in 2013-2014 from 42%. The proportion of households with a mortgage increased from 18% to 26% between 1994-1995 and 2013-2014.
Watt remains positive despite the data. “[The] latest price data could help to reverse this trend, as the housing market tentatively slows,” she said.
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