First-home buyer confidence in builders has plunged to a six-year low as construction industry collapses weigh on Victoria. Picture: Ian Currie

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First-home buyer confidence in builders has plunged to a six-year low as construction industry collapses weigh on Victoria.

A new report from the nation’s second biggest bank has revealed first-time buyers now account for just 35.7 per cent of the new home market, down from 60 per cent of land sales during the pandemic.

The NAB Quarterly Residential Property Survey also revealed Victorian renters are facing a 4.5 per cent hike in the cost of keeping a roof over their head, with a buyer’s advocate who works closely with first-home buyers warning Melbourne’s challenging rental market was unlikely to change in the near future, particularly with current “unprecedented rates of migration”.

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First-home buyers are pulling back on new builds, according to NAB’s latest Residential Property Survey.

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“It’s causing renters to sit back and reflect on their short to midterm accommodation, which can make the idea of purchasing much more appealing,” Amy Lunardi Property founder and buyer’s advocate Amy Lunardi said.

“But because of the challenge of rents going up, (buying property) would involve some short-term sacrifices like going back to house sharing or potentially moving back in with parents to avoid increased rental costs.”

It comes after Victorian building giant Porter Davis went into administration earlier this month, leaving 1500 homes around the state in limbo.

With ongoing concerns for other builders around the state, there are also fears buyers’ concerns could further erode the pipeline of new construction and put a further strain on the struggling industry.

Renters are also facing a 4.5 per cent hike in the cost of keeping a roof over their heads.

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“Buying and building a new home at the moment has become a bit more daunting with the collapse of some big name builders,” Ms Lunardi said.

“There’s always an element of risk with buying land and building, but this just adds to that risk with uncertainty around potentially losing money and ending up with a half-finished product if the builder goes bust.”

Opposition home ownership and housing affordability spokeswoman Jess Wilson said the state government needed to provide certainty to Victoria’s construction sector “to ensure new homes can continue to be built and first-home buyers have the best opportunity to own their own home”.

A government spokesman said support for first-home-buyers through stamp duty exemptions and First Home Owner Grants topped $1bn in the last financial year.

“We understand the challenges of housing affordability and our government’s support is making a difference for thousands of Victorians,” he said.

— with additional reporting by Mitch Clarke

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