A generation of first-time buyers is largely priced out of the property market, ratings agency Fitch Ratings declared last week, saying an explosion in housing investors has been at the expense of those wanting to make their inaugural entry into the market.
Official ABS figures certainly suggest first-home buyer numbers hit record lows in 2014. At the same time, investor loans in Australia now account for half of new loans.
What that data doesn’t show though is that first-time buyers are investors.
There has been a growing trend in recent years for aspiring first-time home buyers to buy a property that is smaller than they require, or in a location in which they don’t choose to live, and letting the property out while renting a more suitable residence. These owner-renters may live in a share household with friends, or live with family.
A question then! When is being priced out being priced out? If you’re forced to speculate on property using zero-interest loans in an area you don’t want to live, effectively using financial engineering to take a high-risk punt on rising prices, as the economy enters an historic adjustment around you, then are you behaving rationally?
I think not.