First home buyers back in force

The number of loans issued to first home buyers is at its highest since December 2009

First home buyers back in force



First home buyers now make up 25.8% of the total owner occupied housing market excluding refinancing – the highest rate since December 2012, a new report shows.

The number of loans issued to first home buyers is now at its highest since December 2009 at 30,894 in the December 2017 quarter. This is an increase of 6.8% over the previous quarter and 32.6% over a year ago, says the latest Adelaide Bank/Real Estate Institute of Australia Housing Affordability Report.

In total, the number of loans excluding refinancing increased 1.5% to 119,880 over the December quarter and 6.7% over the same period last year.

The average loan size to first home buyers increased to $328,533, up 2.6% over the quarter and 1.5% over the past year.

Adelaide Bank’s head of distribution, third party banking, Darren Kasehagen, said the continued increase in the number of first home buyers – with the exception of Western Australia – is a particularly welcome finding.

“In the first home buyer market, Victoria leads on sheer numbers with an increase of 12.6% for the quarter or 9,892 loans for a first property. This was a 39.7% increase year on year. However, New South Wales saw an increase of 74.9% year on year, 10.9% for the quarter, or a total of 7,507 loans to first home buyers,” he said.

By number of loans, the total figure excluding refinancing increased in all states and territories except NSW and Western Australia.

The average loan size also increased in all states and territories during the quarter, with Tasmania recording the largest increase. The average loan amount rose 4.6% to $399,055 over the quarter and 2.5% over a year ago.

Kasehagen said the low interest rate environment combined with fewer investors in competition with first home buyers indicates that there should be strong levels of domestic demand and continuing property market activity.

“The Australian property market is undergoing cyclical change, and my tip is that we’ll see more movement in the ‘upgrader’ market as older home-owners look at ‘right-sizing’ their properties, accessing some equity and shifting to homes that are better suited to changing lifestyles.”


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