AU Many first-time buyers priced out of market across Australia
Property Here - Thursday, April 11, 2013
HOUSING affordability remains a problem across Australia, with many first-home buyers still priced out of the market despite recent interest rate cuts.
JP Morgan's latest snapshot of the local housing market ranks Australia in second place behind Hong Kong for having the world's highest house prices.
The report's co-author Martin North said mortgage repayments remained high because the average loan was getting bigger and the major banks had not passed on the Reserve Bank of Australia's interest rate cuts in full.
As a result, potential home buyers in major capital cities were being put off from plunging into the property market.
"In some of the major markets, such as NSW and Western Australia, over half the people who want to buy can't because they can't afford to,'' he said.
While first-home buyers were put off by high house prices, existing property owners looking to buy wanted to downsize to smaller properties.
The report's fellow co-author Scott Manning said these vendors would not sell at a lower price.
"We've got a generational shift which will take 20 or 30 years to play out,'' he said.
"These people have ridden the wave up but someone's got to buy off them.''
Mr Manning said it was likely the major banks would maintain their current trend of not passing on the RBA's rate cuts in full for another two years.
Read more: http://www.news.com.au/realestate/buying/many-first-time-buyers-priced-out-of-market-across-australia/story-fndban6l-1226618054564#ixzz2Q8jSwKL7