The RBA research discussion paper released today The Property Ladder after the Financial Crisis provides further evidence of the struggles faced by first home buyers.

The report finds that potential first home buyers are less likely to enter the market than those in the early 2000s because: FHBs [first home buyers] are being crowded out of the market by higher housing prices. It seems likely that this is related to external factors, such as investor demand and supply constraints in some cities. (http://www.rba.gov.au/publications/rdp/2017/pdf/rdp2017-05.pdf , page 12)

This is investor demand that has been driven over the last 15 year or so years, in part, by Federal Government tax concessions that favour property investors over first home buyers.

The Turnbull Government and Scott Morrison refuses to reform the generous negative gearing and capital gains tax concessions that encourage property investors to purchase more properties, often outbidding young first home buyers.

The same report also shows the further stress newer home buyers are under:

The median real purchase price of FHB homes in the 200814 period was $387 000, which was almost $100 000 higher than the price paid by FHBs in the 200107 period.

AND

The median deposit size increased by around $28 000 to almost $70 000 in the 200814 period. As a share of disposable income, the deposit size increased from 52 to 75 per cent between the two periods. This increase, together with a rise in the debt-servicing ratio (from 20 to 26), suggests that FHBs might be facing a higher financial burden in the post-financial crisis period. (page 13)

Importantly, the RBA report is a reminder of the benefits of a proper housing affordability policy and spreading the benefits of home ownership to help spread wealth between generations and address rising inequality.

Federal Labor is the only party of government seeking to ensure that theres a more level playing field between property investors and first home buyers.