BETTER times may have arrived in the property market, but it's still a struggle for first home buyers.
While the market has firmed and sales are increasing, first home buyers remain scarce, with new figures showing their numbers have plummeted by 44% in New South Wales.
Bankwest's annual First Time Buyer Deposit Report found 16,577 first time buyers purchased their first home in NSW over the past year, compared with 29,590 in the previous year.
The Australian Bureau of Statistics also reported finance commitments to first home buyers are at their lowest level since they began reporting on them 22 years ago.
The decline comes as house prices across the state rose 7.34%, in contrast with a 2.77% rise in the average wage for people aged 25-34.
"New South Wales first time buyers are facing significant challenges in making their first step onto the property ladder," said Bankwest executive general manager, retail, Mark Reid.
"Wages are struggling to keep pace with increasing house prices causing real affordability issues."
Mr Reid said the October 2012 abolition of the first home owner grant for established homes in both NSW and Queensland were a large part of the cause.
"New South Wales and Queensland were the only states to abolish the grant early on and have both seen significant drops in first time home buyer activity," he said.
"However, there may well be light at the end of the tunnel for first time home buyers, with Australian Bureau of Statistics data showing building approvals across NSW shot up by 22.6% over the year. The first home owner grant for new homes is still available, so perhaps this is a chance for first time buyers to make their move into the property market."
The Bankwest report also calculated how long it takes a first home buyer to save up enough money for a 20% deposit, and for Coffs Coast buyers, it's a long road to home ownership.
Based on local wages and local house prices, the report found it would take a first home buyer 4.45 years to save the $73,200 deposit needed to buy a house in Coffs Harbour, or 3.1 years if they were purchasing a unit.
It was a similar scenario in Nambucca where a house deposit takes 4.23 years of saving for a house and 3.07 for a unit.
Bellingen first time buyers face an even longer road to home ownership.
The survey found first time buyers in Bellingen need to save for 5.03 years for their 20% deposit.
The statistics have prompted renewed calls from the Real Estate Institute of New South Wales (REINSW) for incentives for first home buyers purchasing existing properties to be reinstated.
"The NSW Government's return to surplus signals it is time to allocate much needed funds to first home buyers for the purchase of existing properties," REINSW Young Agents Chapter chairman Eddy Piddington said
"Restricting first home buyer incentives to new builds has not worked. First home buyers can't afford to or don't want to purchase new properties, and as a result many young people now don't want to buy at all."
The $239 million NSW surplus was partly attributed to higher than estimated revenues, including stamp duty collections.
Mr Piddington says if incentives for first home buyers purchasing existing properties aren't reintroduced, NSW must face the reality that buyers may instead relocate out of the state to more affordable areas.
Update your news preferences and get the latest news delivered to your inbox.