First Home Buyers Average Loan Size February 2011


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The average first home buyer in Australia is, in February 2011, having to arrange an average mortgage of $277,000 for their property purchase. This has dropped from the average first home buyers mortgage of $281,600 a year ago in February 2010, and is also slightly lower than it was in February 2009.

The numbers of First Home Buyers is also dropping, in comparison to all property buyers.

This change is shown on the chart below, calculated from ABS data.

First Home Buyers Average Loan Size 2009 to 2011

    Month and Year Average Loan % of all loans
    Feb-2009 $279,000 26.8%
    Mar-2009 $287,000 27.4%
    Apr-2009 $284,500 28.1%
    May-2009 $281,800 28.5%
    Jun-2009 $270,200 27.1%
    Jul-2009 $269,700 25.3%
    Aug-2009 $270,800 24.7%
    Sep-2009 $274,600 26.1%
    Oct-2009 $275,500 26.0%
    Nov-2009 $283,900 22.6%
    Dec-2009 $289,700 21.5%
    Jan-2010 $282,500 21.0%
    Feb-2010 $281,600 18.6%
    Mar-2010 $284,500 16.4%
    Apr-2010 $289,600 16.9%
    May-2010 $286,600 16.5%
    Jun-2010 $283,800 16.2%
    Jul-2010 $286,500 15.9%
    Aug-2010 $283,200 15.5%
    Sep-2010 $280,400 15.9%
    Oct-2010 $283,600 15.4%
    Nov-2010 $278,800 15.6%
    Dec-2010 $281,700 15.8%
    Jan-2011 $274,300 15.2%
    Feb-2011 $277,000 14.9%

The logical reason for the drop in numbers buying, is the reduction in the First Home Buyers Grants now available. This is one reason that some people are using to show how bad the situation is now for First Home buyers, with the numbers having dropped from almost 30% down to 14.9%. At first glance this does seem a troublesome figure, when highlighted as above, but, when looked at over a longer period, you can see that 2009 was the odd year out, and all that has happened is that First Home buyer numbers are returning to normal.


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First Home Buyers Average Loan Size 2003 to 2011

    Month and Year Average Loan % of all loans
    Feb-2003 $160,500 15.7%
    Feb-2004 $186,300 12.7%
    Feb-2005 $210,200 15.9%
    Feb-2006 $220,300 17.5%
    Feb-2007 $228,600 17.4%
    Feb-2008 $227,900 17.3%
    Feb-2009 $279,000 26.8%
    Feb-2010 $281,600 18.6%
    Feb-2011 $277,000 14.9%

However, how does this average First Home Buyers Mortgage compare to the average wages over the years ?

Most First Home Buyers these days are two income families, many being both full time, but some with one part time. A comparison against both possibilities is shown below, using average wages from the ABS.

Australian First Homes Buyers Mortgage and Income Multipliers

    2 Full Time

    1 Full + 1 Part Time

    Month – Year Average Loan Income multiple Income multiple
    Feb-95 $90,800 $67,574 1.34 $52,640 1.72
    Feb-03 $160,500 $93,298 1.72 $72,407 2.22
    Feb-04 $186,300 $98,571 1.89 $76,609 2.43
    Feb-05 $210,200 $102,497 2.05 $79,589 2.64
    Feb-06 $220,300 $107,390 2.05 $83,364 2.64
    Feb-07 $228,600 $110,204 2.07 $85,675 2.67
    Feb-08 $227,900 $116,048 1.96 $90,061 2.53
    Feb-09 $279,000 $122,190 2.28 $94,973 2.94
    Feb-10 $281,600 $128,612 2.19 $100,121 2.81
    Feb-11 $277,000 $134,118 2.07 $104,302 2.66

    For the 1 Full time and 1 Part Time incomes, I have used the Male Full time plus 50% of the Female Part time average incomes, as this is probably the most common combination.

You can see that the multiples of the mortgage required over the actual incomes are quite low, when compared to some of the common multiples being quoted of 7, 8, 9 or even 10 times incomes etc.

Even if the average First Home buyers only earned 50% of the average wage, and at that stage we would expect both to need to work full time, the multiples would have been:

  • 2.68 in 1995
  • 3.44 in 2003 up 28% since 1995
  • 4.14 in 2011 up 20% since 2003

Not that great a change over the last 8 years, but more-so over 16 years.

The average wage figures used were also sourced from the ABS:

Full Time Adult Total Annual Earnings

    Month Male Female Adult
    Nov-1995 $37,705 $29,869 $32,744
    Nov-2002 $51,516 $41,782 $48,012
    Nov-2003 $54,647 $43,924 $50,851
    Nov-2004 $56,680 $45,817 $52,832
    Nov-2005 $59,337 $48,053 $55,375
    Nov-2006 $61,147 $49,057 $56,820
    Nov-2007 $64,074 $51,974 $59,779
    Nov-2008 $67,756 $54,434 $62,863
    Nov-2009 $71,630 $56,982 $66,248
    Nov-2010 $74,485 $59,634 $68,900
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