First-home buyers come out on top in June, according to new ABS data

First-home buyers are currently dominating owner-occupier housing loans, with the number rising again in June 2018 to the highest rate since October 2012.

The ABS housing finance figures for June 2018 show that FHBs now account for 18.1 per cent of owner-occupier home loans.

The number of FHB owner-occupier loans has now increased by 11.4 per cent over the last 12 months.

There are a few reasons behind this welcome trend. “Several state governments, including NSW
and Victoria, have enhanced their incentives, giving the first-home buyer segment a new lease of life,” said HIA Senior Economist Shane Garrett.

“In recent years, record numbers of newly built apartments have also come on stream. In terms of design and price point, many of these are particularly suited to first-home buyers and have made the purchase of their first home possible,” said Mr Garrett.

The ABS figures for June also show an overall drop in new lending of 1.6 per cent from the previous month, with both investors and owner-occupiers dropping.

“First-home buyers are finally getting some time in the sun. There’s space in the market for them to find their feet without having to go toe-to-toe with cashed-up investors,” said RateCity research director Sally Tindall.

“While a lot of investors have sworn off property until the bottom of the market hits, first-home buyers who are looking for a place to call home for the next five or 10 years are often more focused on the long game,” Ms Tindall added.

The recent announcement that Australia’s population has hit the 25 million mark shows how important it is that a focus is placed on positive housing changes and making the market accessible to homeowners, said Mr Garrett.

“Investment participation in the housing market plays a key role in delivering new housing supply and is vital to the healthy functioning of rental markets right around Australia,” he said.

“Recent policy and regulatory changes have made it more difficult for investors to participate in the housing market. With our population hitting 25 million, any obstacles to housing supply must be avoided so that the industry can meet our future housing needs.”

The ABS data for June also showed that the average loan size for first-home buyers has hit a record high of $349,800.

Non-bank lenders are also continuing to gain market share from the banks, increasing the value of new owner-occupier loans by 13.37 per cent year-on-year. Banks recorded a drop of 0.81 per cent in the value of new loans across the same period.  

“The banks are throwing everything at potential new customers to attract new business and put a stop to this slide. It will be interesting to see how far they go in order to protect their market share,” said Ms Tindall.  

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Hannah Blackiston

Hannah Blackiston was an in-house journalist with Elite Agent. She worked with the company from January 2018 to January 2019.