The deputy governor of the Reserve Bank, Ric Battellino, says there has been a notable decline in the number of first home owners under the age of 35 over the past 10 to 15 years.
Speaking at a national housing conference in Melbourne, Battellino said the decline may be due to demographic factors, such as young people staying in education longer, but it may also be financially driven.
“A particular problem for first home owners is that the ratio of house prices to income has substantially increased the deposit needed to get into the market,” he said.
“On plausible assumptions, the deposit needed for first home owners now may be around one and a quarter years of income; this is almost twice what it was 15 years ago,” he added.
Battellino said despite various governments trying to help first home buyers in this area through first home owners grants, first home buyers still struggle because “these concessions tend to become capitalised into higher house prices.”
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