While Canberra’s homeowners have enjoyed a general 15% increase in house values since 2014, the jump in house prices spells bad news for prospective first-home buyers in the federal capital.

Only 1,776 loans were approved for first-home buyers in Canberra over 2016, according to new data from the Australian Bureau of Statistics (ABS). This was a decrease of 146 approvals, or 7.6% lower than the 1,992 approvals recorded over 2015. In contrast, the average first-home loan in Canberra increased by 2.3% to $317,643.

“Market share is another reflection of performance, with Canberra first-home buyers accounting for just 9.8 per cent of total residential lending approved over 2016,” said Andrew Wilson, senior economist at the Domain Group. “This was the lowest result recorded by the local market since 2004 and well below the long-term average of 13.9 per cent.”

First-home buyer affordability can also be measured by assessing the difference between the notional average purchase price for a first-home buyer and the Canberra median house price. The First Home Buyer Price Gap Index is now the highest recorded since 1992.

With house prices on the rise, the number of suburbs deemed affordable for first-home buyers has noticeably decreased. Only Belconnen recorded a 2016 median house price at or below the notional average first-home buyer purchase price over the same period. 

With Canberra house prices likely to continue to rise over 2017, the prospect for [greater numbers] of first-home buyers remains bleak with the prices gap likely to continue to widen,” Wilson said.

Further complicat ing the situation are increasing rents in the highly competitive rental market and the “lowest wage growth on record.” These factors are making it harder for renters to put money aside for a deposit.