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A real estate agent's sign outside a house shows that it has recently been sold in Sydney October 13, 2014. Frothiness in Australia's property market has triggered central bank warnings of regulatory steps to rein in loans to investors, but the nation's banks are turning a deaf ear, sceptical that any such action is needed or imminent. Lending to investors has jumped this year to its highestsince comparable records started in 1991, accounting for about half of Australia's residential loans in value terms. Investor interest has also helped pushed housing prices in Sydney and Melbourne to the point where most first-time home buyers are widely seen as priced out of the market. Picture taken October 13, 2014. Reuters/David Gray

First homebuyers in Sydney are decreasing despite local market’s showing initial signs of slowing down after a record of high growth. Australian Bureau of Statistics calculates a plunge of 0.7 percent over July in loan approvals for first-time buyers in NSW.

The first homebuyers have come down to 2,141 from 2,126. Although the difference in buyers was not much high from the last month’s record, numbers of loans approved over the first seven months of this year have gone 5.6 percent below last year’s record over the same period.

The decline in first home buyers could be attributed to the lesser numbers of loan approvals. Nonetheless, the overall market shares have increased. In July, of all residential lending in NSW, only 7.7 percent first home buyers had their loans approved but it was slightly higher than what was recorded in May.

According to the Domain group, NSW has recorded the lowest loan approvals for the first home buyers among all the states. In Sydney, these buyers are also facing problems due to affordability crisis, with sky-rocketing house prices recorded over the past three years.

First home buyer activity also remains flat despite auction clearance rates touching an all-time low of 69.6 percent and cooling down of the housing market. In the past few months, clearance rates were on a slide almost in every city due to greater numbers of listings, higher priced auctions and fewer investors. This resulted in many vendors selling their properties ahead of the auction, fearing the presence of a fewer buyers.

The highest amount of loan approved over July in NSW reached AU$402,100, followed by Victoria the next highest at AU$347,600. Recently, regulator authorities have increased interest rates in order to reduce lending residential investor lending.

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