Market tough for first-home buyers FIRST-home buyers face an uphill struggle to get into the market over the rest of this decade, as property prices are tipped to continue rising faster than wages. A new report warns that while the massive surge in real estate prices in Melbourne over the past 12 months is expected to slow sharply, affordability will deteriorate further as a sluggish economy and rising unemployment keeps wage growth low. Victorian households have also been whacked with a whopping $1000 in government charges over the past 12 months - the second highest in the nation - led by surging property charges and water costs, the latest inflation data reveals. These charges can no longer be seen as one-offs. This is more like tax by stealth," Deutsche Bank chief economist Adam Boyton said. For five years governments have been passing charges on directly to households rather than trying to find savings. In a global housing and mortgage report, global ratings agency Fitch said Australian homeowners would this year experience gains of 4 per cent - less than half last year's 9.8 per cent appreciation. Prices are tipped to rise a further 4-5 per cent in 2015. Australian house prices are already rated as the second most expensive in the world and have more than tripled since 1997. "Affordability in Australia (is) to deteriorate in the near term, with house prices continuing to rise more than income levels," said Fitch director Ben Newey. The ability of self-managed super funds to borrow to buy property is also another factor that is locking young buyers out of the market. This bad news for prospective property buyers comes hot on the heels of figures showing the share of new home loans by first-home buyers have already dropped to their lowest level since the Australian Bureau of Statistics started keeping figures in 1991. Leading economist Saul Eslake this week hit out at government policy flops over the past decade that have made the problem even worse. In a scathing personal submission to the Senate Economics References Committee's inquiry into housing affordability, Mr Eslake said government policies have inflated demand for housing while failing to promote the supply of new homes. He says controversial first-home grants and the tax concessions commonly referred to as "negative gearing" have fuelled housing prices and forced young buyers to the sidelines. This comes as a surprise lift in inflation to 2.7 per cent, as a result of sharp increases in prices for fruit and vegetables, reduced the chance of another cut in the official cash rate by the Reserve Bank of Australia. Consumer confidence is also on the slide after an initial lift after the Federal Election late last year. Most economists expect the RBA to keep rates on hold at 2.25 per cent for most of the year.